2009-02-12 08:00:00 CET
2009-02-12 08:00:03 CET
REGULATED INFORMATION
Talentum Oyj - Financial Statement Release
TALENTUM OYJ'S YEAR-END STATEMENT 2008
TALENTUM OYJ FINANCIAL STATEMENT RELEASE 12.2.2009 at 09.00 am TALENTUM OYJ'S YEAR-END STATEMENT 2008 October - December 2008 in brief, continuing operations - Net sales EUR 25.0 million (EUR 28.3 million) - Operating profit 14.8% (21.2%) - Net sales (EBIT) EUR 3.7 million (EUR 6.0 million) - The reduction in media advertising and integration costs in Sweden weakened profitability - Adjusting costs to correspond to reduced sales has begun - The earnings per share were EUR 0.06 (EUR 0.10) - The Group's financial position is good - Premedia classified as a discontinued operation January - December 2008 in brief, continuing operations - Net sales EUR 93.4 million (EUR 89.1 million) - Operating profit margin 12.3% (15.6%) - Operating profit (EBIT) EUR 11.5 million (EUR 13.9 million) - The costs of integration in Sweden and start-up costs of Byggvärlden magazine reduced profitability by EUR 1.5 million - Net sales of online operations grew by 70% from EUR 6.5 million to EUR 11.0 million, expenses were EUR 1.6 million higher than the previous year - Earnings per share from continuing operations were EUR 0.19 (EUR 0.22) - Cash flow from continuing operations were EUR 10.5 million (EUR 12.9 million) - Earnings per share for discontinued operations were EUR -0.07 (EUR-0.02) - Group's earnings per share were EUR 0.12 (EUR 0.20) - Dividend and return of equity proposed for 2008 total EUR 0.10 per share (dividend EUR 0.20 per share) KEY INDICATORS, CONTINUING OPERATIONS *) -------------------------------------------------------------------------------- | EUR million | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change | | | 2008 | 2007 | % | 2008 | 2007 | % | -------------------------------------------------------------------------------- | Net sales | 25.0 | 28.3 | -11.9 | 93.4 | 89.1 | 4.8 | -------------------------------------------------------------------------------- | Operating profit | 3.7 | 6.0 | -38.3 | 11.5 | 13.9 | -17.1 | -------------------------------------------------------------------------------- | as % of net sales | 14.8 | 21.2 | | 12.3 | 15.6 | | -------------------------------------------------------------------------------- | Operating profit | 3.7 | 5.4 | -31.0 | 11.5 | 13.2 | -13.1 | | before non-recurring | | | | | | | | items | | | | | | | -------------------------------------------------------------------------------- | as % of net sales | 14.8 | 19.0 | | 12.3 | 14.9 | | -------------------------------------------------------------------------------- | Total assets | | | | 49.7 | 89.0 | -44.2 | -------------------------------------------------------------------------------- | Investments | 0.5 | 5.8 | -91.8 | 2.4 | 10.0 | -76.3 | -------------------------------------------------------------------------------- | as % of net sales | 1.9 | 20.9 | | 2.6 | 11.3 | | -------------------------------------------------------------------------------- | Return on investment | | | | 30.8 | 26.6 | | | % | | | | | | | -------------------------------------------------------------------------------- | Return on equity % | | | | 29.9 | 29.7 | | -------------------------------------------------------------------------------- | Equity ratio % | | | | 44.8 | 36.7 | | -------------------------------------------------------------------------------- | Gearing ratio, % | | | | -15.4 | 16.7 | | | (net debt to equity) | | | | | | | -------------------------------------------------------------------------------- | Interest-bearing | | | | 2.3 | 19.2 | -87.9 | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Net interest-bearing | | | | -3.4 | 5.3 | -164.1 | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Personnel on average | | | | 818 | 763 | | -------------------------------------------------------------------------------- | Earnings per share, | 0.06 | 0.10 | -38.2 | 0.19 | 0.22 | -13.5 | | EUR | | | | | | | -------------------------------------------------------------------------------- | Cash flow from | 0.14 | 0.17 | -15.3 | 0.24 | 0.29 | -18.2 | | operating activities | | | | | | | | per share, EUR | | | | | | | -------------------------------------------------------------------------------- | Equity per share, | | | | 0.51 | 0.69 | -26.2 | | EUR | | | | | | | -------------------------------------------------------------------------------- | Market | | | | 81.6 | 121.1 | -32.7 | | capitalization on | | | | | | | | closing rate at | | | | | | | | period end | | | | | | | -------------------------------------------------------------------------------- *) These figures do not include TV Content Production and premedia business area, which are presented in discontinued operations. However, the discontinued operations are included in total assets of Talentum Group in 2007 and used in key figures calculation. CEO JUHA BLOMSTER: “The Group's strategy was carried out with determination. During the year, Talentum sold both its TV content production as well as the rest of its premedia operations. This was a significant step for Talentum, as we can now concentrate all our resources on developing our publishing operations. In many ways 2008 was a good year for Talentum. The circulations of Talentum publications remained at a good level and more over, Arvopaperi magazine increased its circulation by over 14%. Training and seminar operations expanded, specialty magazines did well and the integration of the companies acquired in 2007 was largely completed. The year got off to a good start for media advertising. However, the growth in media advertising slowed significantly in Finland from February to March and turned down at the end of the year. In Sweden the significant fall was in the second half of the year. Talentum's media sales' performance in Finland was better than general developments in the periodicals' market, even though it suffered particularly from the reduction in recruitment advertising caused by the economic situation. The process of cutting costs and rationalizing operations has been started during 2008 in order to safeguard financial performance. Cost-reduction programme aims to achieve annual savings of over two million Euros. We have developed both our printed and electronic media. We invested in online operations; both technical renewal and content production as well as developing services. At the same time we improved cooperation between Talentum's media to increase synergies. The sales of online operations grew and now accounts for a significant share of the overall operations. I believe that focusing on publishing and a strong balance sheet will give Talentum a good start for 2009 to actualize strategy.” Operating environment and seasonal variation Financial performance in Talentum's operating areas weakened rapidly in the last quarter of the year. The latest public forecasts for the development of the gross domestic product in the Group's main market areas, Finland and Sweden, are negative for 2009 and only slightly positive or negative for 2010. According to TNS Gallup, media advertising in periodicals in Finland fell by 4% (not including election advertising) from January to December. Online advertising continued to increase in Finland and growth in 2008 was 22%. Media adverting in Sweden grew 3.7% from January to September, but the low level of media sales at the end of the year depressed the full year's growth percentage. (Institutet för Reklam- och Mediestatistik). There were fewer job advertisements in both Finland and Sweden as a general uncertainty about the economic situation spread across several sectors. Talentum estimates that the need for information among its target professional groups will remain high in spite of the economic situation. The choice of information channel for professionals; books, training, seminars, magazines, online services, could change. Talentum produces customer-orientedly quality content for all those channels. Seasonal variation was exhibited in the media and media service markets. Whether the Easter holiday falls in the first or second quarter of the year in spring affects the results in that quarter. During the summer holidays magazines and books do not generally come out and for this reason the third quarter is the lowest in terms of sales. Operations are generally at their most busy in the last quarter. The downturn in the markets in 2008 reduced sales in the last quarter. Consolidated net sales and profit in October - December Consolidated net sales from continuing operations in October to December were EUR 25.0 million (EUR 28.3 million). Net sales from publishing reduced by 13% and were EUR 23.5 million (EUR 27.0 million). As the economic situation weakened, advertising revenue, which is sensitive to economic conditons, reduced in the Group and this reduced net sales as did the weakening of the Swedish crown. Operating profit from continuing operations in October to December was EUR 3.7 million (EUR 6.0 million) and 14.8% of net sales (21.2%). Operating profit before extraordinary items was EUR 3.7 million (EUR 5.4 million). Publishing operations' operating profit was EUR 4.1 million (EUR 6.3 million). The integration costs of the publishing operation acquired in Sweden in 2007, and costs of launching Byggvärlden magazine reduced profits by EUR 0.4 million. Net financing expenses amounted to EUR 0.0 million (EUR -0.1 million). The share in the results of associated companies was EUR 0.1 million (EUR 0.0 million). The result before tax from continuing operations was EUR 3.8 million (EUR 5.9 million). The result from continuing operations was EUR 2.5 million (EUR 4.1 million). The result from discontinued operations was EUR -0.7 million (EUR 0.5 million). The Group's result for the period under review was EUR 1.8 million (EUR 4.6 million). Consolidated net sales and profit January - December Consolidated net sales from continuing operations in January to December were EUR 93.4 million (EUR 89.1 million). Publishing's net sales rose by 5% to EUR 87.7 million (EUR 83.8 million). The publishing operations acquired in Sweden in 2007 contributed EUR 6.5 million to the growth in publishing's net sales. Operating profit from continuing operations in January to December was EUR 11.5 million (EUR 13.9 million) and 12.3% of net sales (15.6%). Operating profit before extraordinary items was EUR 11.5 million (EUR 13.2 million). The previous year's result included extraordinary revenue resulting from a change in advertising tax in Sweden. Publishing operations' operating profit was EUR 12.5 million (EUR 14.8 million). The integration costs of the publishing operation acquired in Sweden in 2007, and costs of launching Byggvärlden magazine reduced profits by EUR 1.5 million. Net financing expenses amounted to EUR -0.3 million (EUR -1.1 million). Financing costs in the comparable period included the sales loss from an associated company of EUR 0.5 million. The share of the result of associated companies, EUR -0.4 million (EUR -0.1 million) includes not only the share of the result for the period under review, but also losses of EUR 0.3 million from the previous period which came to light after the closing date of an associated company. The result before tax from continuing operations was EUR 10.8 million (EUR 12.7 million). The result for the period under review was EUR 8.1 million (EUR 9.5 million). The result from discontinued operations was EUR -2.9 million (EUR -0.3 million). The Group's result for the period under review was EUR 5.2 million (EUR 9.2 million). TV content production which was sold in the first quarter was classified to discontinued operation in January. As the remaining part of the Premedia division, Faktor, was sold in the last quarter, Premedia is also presented under discontinued operations. The effect on profit of discontinued operations is presented in its entirety in the discontinued operations line in the income statement. The outlook for the branch and Talentum in 2009 With the general weakening of economic conditions and forecasts, presenting the outlook for 2009 is extremely difficult. We assume that media advertising will fall in both Finland and Sweden in 2009. Talentum estimates that both net sales and operating profit for current operations will be clearly lower than the level of the previous year. Adjusting costs and rationalizing operations has been started in order to safeguard financial performance. Talentum keeps its strategic targets unchanged. Talentum's strong balance sheet and the market situation enable strategic acquisitions. Short term operational risks The slow economic trend has effect on Talentum's earnings and revenue structure. About 40% of the Group's annual net sales are tied to advertising, and especially to b-to-be sector that is sensitive to economic conditions. Job advertising is the most sensitive advertising in reacting to changes in economic conditions. We will endeavor to manage this market risk by increasing the revenues from circulation sales and content sales. All Talentum's products and services aim to be market leaders in their own field, which makes it possible to succeed even during a low cycle. Internet services are a variable factor that can change the revenue generation model of magazines and books temporarily or over the long period as well. Media usage habits can affect Group's revenue structure. Should we fail to develop our business to meet changing media usage habits, it may have effect on Talentum's business. The group subscriptions for the biggest magazines are important in terms of the area they cover, and contracts have been in effect for several decades. Changes to them may have major effects on magazine circulations and would also have mediate effects on media sales. Cash flow, financial position and balance sheet The cash flow from operating activities for continuing operations was EUR 10.5 million (EUR 12.9 million) in January-December. The change in working capital was EUR 0.9 million (EUR -2.2 million). The Group's balance sheet total reduced significantly during the year as a consequence of the business activities that were sold and at the end of December stood at EUR 49.7 million (89.0 million). Interest-bearing net debt was EUR -3.4 million (EUR 5.3 million). The Group's liquid assets, EUR 5.7 million (EUR 13.8 million), were mainly invested in interest-bearing instruments. The Group's interest-bearing liabilities were EUR 2.3 million (EUR 19.2 million), of which unredeemed commercial paper accounted for EUR 0.0 million (EUR 14.0 million). To strengthen the Group's financial position, Talentum Oyj agreed a current account limit in February of EUR 12.0 million and a financial credit limit in the sum of EUR 20.0 million. According to the rules agreed, loans within the financial credit limit can be drawn down and repaid throughout the duration of the agreement until 2011. The limits were unused at 31.12.2008. The equity ratio was 44.8% (36.7%) at the end of the year. The Group's equity per share was EUR 0.51 (EUR 0.69). The Group does not hedge against currency fluctuations with regard to the acquisition of subsidiaries. The weakening and strengthening of the Swedish crown against the Euro affects the Group's equity through the translation difference that arises from the acquisition of the Swedish subsidiaries. In these financial statements, the translation difference reduced the Group's equity by EUR 2.3 million. Investments The gross investments in tangible and intangible assets in continuing operations totaled EUR 2.4 million (EUR 10.0 million) between January and December which is 2.5% (11.2%) of net sales. Investments in the comparable period included the acquisitions of Dagens Media and Talentum Fakta. EUR 1.5 million of the investments were capitalized development expenses for online operations. Other investments comprised normal replacement and maintenance, such as procurement of equipment, software and fixtures. Group restructuring Talentum Oyj disposed of most of its TV content production, i.e. Varesvuo Partners Oy, in an agreed sale in February. The sub-group, Oy Filmiteollisuus Fine Ab, which was also part of TV content production, was sold separately in March. The Premedia business operations were also disposed of in accordance with strategy. In February, the Talentum Group sold its 100 per cent shareholding in DH Tools Oy, and in April it sold Sata-Flexo Oy and Marvaco Oy. In November, the Group disposed of the last of its operations in this sector with the sale of the shares of Faktor Oy. The profit or losses arising from these sales as well as income, are presented in the income statement under discontinued operations for both January - December 2008 as well as for 2007. In addition several small mergers were executed in Finland in order to firm up the Group structure. Personnel During January - December, there were an average of 818 (763) people working in the Talentum Group's continuing operations. Staff are divided by country as follows: Finland 426 people (424), Sweden 198 (144), Latvia 79 (83), Lithuania 33 (23), Estonia 73 (80) and Russia 9 (9). The growth in personnel in Sweden was a result of the acquisitions made during 2007. BUSINESS AREAS Publishing -------------------------------------------------------------------------------- | EUR million | 10-12/2008 | 10-12/2007 | 1-12/2008 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | | | | | -------------------------------------------------------------------------------- | Advertising net sales | 10.5 | 12.9 | 41.1 | 42.6 | -------------------------------------------------------------------------------- | Circulation net sales | 6.4 | 6.8 | 24.8 | 24.3 | -------------------------------------------------------------------------------- | Other content net | 6.7 | 7.4 | 21.8 | 16.9 | | sales | | | | | -------------------------------------------------------------------------------- | Total | 23.5 | 27.0 | 87.7 | 83.8 | -------------------------------------------------------------------------------- *Books and training operations as well as information services belong to other content revenues. October - December The net sales of publishing operations from October - December was EUR 23.5 million (EUR 27.0 million), a change of -13% over the previous year. The operations acquired in Sweden in 2007 brought EUR 2.1 million of net sales. The weakening of the Swedish crown against the Euro reduced net sales by EUR 0.9 million compared to the previous year. Advertising revenue was 9% lower than last year in Finland and 28% lower in Sweden. Swedish advertising revenues are more sensitive to economic fluctuations because of the larger proportion of job advertisements. Advertising in electronic media continued to grow. Talentum's magazine circulation revenues grew in Finland for small magazines and overall remained at the level of the previous year. Magazines' circulation revenues fell in Sweden. Electronic access to other content revenues, mainly legal books, increased, and sales of printed books reduced. Training operations performed better than the previous year. The total growth in net sales of online operations in the last quarter was 6%. Online operations' share of publishing's net sales was 12% and EUR 2.7 million (EUR 2.6 million). Publishing operations' operating profit (EBIT) was EUR 4.1 million (EUR 6.3 million). The result from the comparable period included EUR 0.6 million extraordinary revenue from a change in advertising tax in Sweden. The financial result of Finland's and Sweden's publishing operations weakened because of the reduction in advertising revenue. The integration costs of Talentum HR in Sweden (previously Talentum Fakta) and the launch costs of a Byggvärlden magazine weakened the financial result by about EUR 0.4 million. Investments were made in online operations in Finland and Sweden according to plan and costs were about EUR 0.3 million higher than a year earlier and additionally EUR 0.2 million of development costs were capitalized during the period under review. Investments in circulation sales growth continued and the investments made now will be seen in revenues in the future. January - December Publishing's net sales from January - December was EUR 87.7 million (EUR 83.8 million), which was 5% growth over the previous year. The operations acquired in Sweden in 2007 brought EUR 8.7 million of net sales. The weakening of the Swedish crown against the Euro reduced net sales by EUR 1.4 million compared to the previous year. Advertising revenues decreased 1% in Finland and 6% in Sweden as a consequence of weaker sales in the last quarter. Recruitment advertising accounts for 36% (39%) of all advertising sales. Talentum's magazine circulation revenues grew 4% in Finland and fell 2% in Sweden. The comparative figures for books, which are included under other content revenues, include revenues from works produced, and these do not appear every year. Training operations performed better than the previous year. The growth in net sales for online operations was 70%. Online operations' share of publishing's net sales was 13% and EUR 11.0 million (EUR 6.5 million). Publishing operations' operating profit (EBIT) was EUR 12.5 million (EUR 14.8 million). The result from the comparable period included EUR 0.6 million extraordinary revenue from Sweden. The integration costs of Talentum HR in Sweden (previously Talentum Fakta) and the launch costs of Byggvärlden magazine weakened the financial result by about EUR 1.5 million. Investments were made in online operations and costs were about EUR 1.6 million higher than the previous year and additionally EUR 1.5 million of development costs were capitalized during the period under review. Investments in online operations will continue in 2009, but more moderately than in 2008. Publishing's net sales and operating profit by country -------------------------------------------------------------------------------- | EUR million | 10-12/2008 | 10-12/2007 | 1-12/2008 | 1-12/2007 | -------------------------------------------------------------------------------- | Net sales | | | | | -------------------------------------------------------------------------------- | Finland | 14.5 | 16.4 | 53.1 | 53.9 | -------------------------------------------------------------------------------- | Sweden and other | 9.0 | 10.6 | 34.6 | 29.9 | -------------------------------------------------------------------------------- | Total | 23.5 | 27.0 | 87.7 | 83.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | | | | | -------------------------------------------------------------------------------- | Finland | 3.2 | 4.6 | 9.7 | 10.6 | -------------------------------------------------------------------------------- | Sweden and other | 0.9 | 1.8 | 2.8 | 4.2 | -------------------------------------------------------------------------------- | Total | 4.1 | 6.3 | 12.5 | 14.8 | -------------------------------------------------------------------------------- Talentum Fakta, nowadays Talentum HR, was acquired by the Group in November 2007 with the objective of diversifying the revenue structure and strengthening the offer to the individual professionals customer target group. During 2008, a significant integration program was carried out in the company and it moved to the same premises as other Talentum staff in Sweden. One of the bigger challenges was renewing the IT system and migrating the acquired operation to Talentum's systems. Integration costs rose to higher than the original estimates as a result of this. Direct Marketing October - December Direct marketing's net sales for October - December were EUR 2.3 million (EUR 2.5 million), and operating profit (EBIT) was EUR 0.2 million (EUR 0.4 million). The fact that there were fewer sales days in December compared with the previous year was a particular factor in reducing sales. The result was reduced by the operating profit of direct marketing operations in the Baltic states. January - December Direct marketing's net sales for January - December were EUR 9.8 million (EUR 9.5 million), and operating profit (EBIT) was EUR 1.1 million (EUR 1.3 million). The growth in net sales was at the level expected. AGM, Board and auditor Talentum's Annual General Meeting was held on March 27, 2008. The meeting confirmed the financial statements for January 1 - December 31, 2008 and granted the company's Board of Directors and CEO exemption from liability. The AGM re-elected Manne Airaksinen, Harri Kainulainen, Eero Lehti, Kai Mäkelä, Atte Palomäki and Tuomo Saarinen as members of the Board of Directors. Tuomo Saarinen was re-elected Chairman of the Board of Directors and Manne Airaksinen re-elected Deputy Chairman. Authorized Public Accountants PricewaterhouseCoopers Oy with APA Juha Wahlroos as the accountable auditor were re-elected auditors. The AGM on 27 March 2008, accepted the Board's proposal of a dividend payment of EUR 0.20 per share. The date of payment was April 8, 2008 and the record date was April 1, 2008. Shares and share capital At the end of the financial period, Talentum Oyj's share capital totaled EUR 18,593,518.79 and the company had 44,295,787 fully paid-up shares. The shares are listed on the NASDAQ OMX Helsinki Stock Exchange. At the end of the financial period, the company and its subsidiaries held 681,000 company shares, which is about 1.5% of Talentum's total stock and votes. A total of 11,572,194 shares were traded during the financial period, 26.1% of the total average stock during the financial period. The highest price of shares during the period under review was EUR 3.16 and the lowest was EUR 1.63. The share price at December 31, 2008 was EUR 1.87. Shareholdings of the Board of Directors and Managing Director On December 31, 2008, the number of Talentum Oyj shares and options owned by members of the Board of Directors and the CEO personally and through companies in which they have a controlling interest was 4,665,708, representing 10.5% of the company's total shares and votes. Board of Directors' authorizations Authorization of the Board of Directors to decide on a share issue including the conveyance of the company's own shares and issue of special rights The Annual General Meeting on March 27, 2008 authorized the Board of Directors to decide on a share issue that may be either chargeable or free of charge, including the issuing of new shares and the conveyance of the company's own shares possibly in its possession. The Board of Directors has been authorized to decide on an issue of option rights and other special rights which grant entitlement, against payment, to receive new shares or shares possibly in possession of the company. By virtue of the aforesaid authorizations, a maximum of 3,500,000 new shares and/or the company's own shares possessed by the company, which corresponds to approximately eight per cent of the issued shares of the company, may be issued together in one or several lots as a share issue and/or conveyance. The authorization is valid until 30 June, 2009. The Board is otherwise authorized to decide all the conditions relating to a share issue and special rights including the right to decide on a directed issue and the granting of special rights. Shareholders' pre-emptive subscription rights can be suspended providing that there is a significant financial reason for the company to do so. Authorization of the Board of Directors to decide on acquisition of the company's own shares The Annual General Meeting on March 27, 2008 authorized the Board of Directors to decide on the acquisition of the company's own shares. The shares can be acquired at a value that is decided by the Board of Directors and is based on the fair value at the time of the acquisition related to the price of shares in public trading. The company's own shares may be only acquired using unrestricted equity. By virtue of the authorization, a maximum of 3,500,000 of the company's own shares, which corresponds to approximately eight per cent of the issued shares of the company, can be acquired either in one or in several lots. The authorization is valid until 30 June, 2009. The Board of Directors is otherwise authorized to decide on all the conditions regarding the acquisition of such shares including the manner of acquisition of the shares. The authorization does not exclude the right of the Board of Directors to decide on a directed acquisition of the company's own shares providing that there is a significant financial reason for the company to do so. Directed free share issue On 8 March 2007 the Board of Directors of Talentum Oyj decided to establish a new share-based incentive plan for the Group Management. At the AGM held on 27 March 2007, the Board was given the authority to take decisions regarding directed share issues or directed free share issues. The Board decided to give staff, who were part of the management's share-based bonus scheme, a total of 74,970 new shares in the company as a directed free share issue in accordance with the conditions of the share bonus scheme. The shares were entered in the company register on March 20, 2008. Acquisition of the company's own shares On the basis of the authority granted them at the AGM on March 27, 2007, on February 26, 2008 Talentum Oyj's Board decided to acquire a maximum of 500,000 of the company's own shares, which corresponds to about 1.13 per cent of all of the company's shares. The shares will be acquired with the company's distributable funds and the acquisition of the shares will thus reduce the company's distributable equity. The shares will be acquired through public trade on the OMX Nordic Exchange in Helsinki at the price on the purchase date in accordance with the regulations governing the acquisition of shares through public trade. The shares will be acquired for use in possible company acquisitions and other arrangements when the company acquires capital related to its operations, as well as for developing the company's capital structure including the possible disposal of the shares and their cancellation. There is thus a pressing financial reason for the acquisition of the shares. On the basis of the authority, the company had acquired 500,000 of its own shares by December 31, 2008 and the company controlled a total of 681,000 of its own shares. Reduction of share premium reserve At the AGM held on March 27, 2008 it was decided that the share premium account on the company's balance sheet at December 31, 2007 should be reduced by EUR 89,593,601.28. The amount of the reduction will be transferred into the invested non-restricted equity fund. After the reduction, the value of the share premium fund on the balance sheet will be zero. In accordance with section 14 paragraphs 3-5 of the Companies Act, the reduction of the share premium reserve requires an announcement and registration procedure and the decision was put into effect on August 31, 2008. Management's equity-based incentive plan The management of Talentum Oyj Group has an equity-based incentive plan. The plan has three earnings periods, each of at least one and a maximum of three financial years. The first earnings period was the 2007 financial year and the second earnings period was the 2008 financial year. The total length of the plan is five years. The rewards will be paid partly in the Company's shares and partly in cash after the end of each earnings period. The proportion to be paid in cash will cover taxes and tax-related costs arising from the reward. Transferring the shares earned from an earnings period within two years of the end of the earnings period is prohibited. After this, the CEO of the Company must, however, own 50% of the shares earned on the basis of the plan as long as the service of the CEO continues and for one year after the end of the service. There were 10 people covered by the plan during the 2008 earnings period. The yield is based on the Group's net sales, operating profit as well as the overall yield on Talentum's shares. For the earnings period 2008 the rewards will not be paid. At the beginning of 2009, the Board will decide on the following and final earnings period for this program. Initially it was possible to earn 493,500 shares, of which 74,970 have been issued. Notifications On 6 March, 2008, Ilmarinen Mutual Pension Insurance Company announced that its holding in Talentum Oyj's shares and voting rights exceeded the one twentieth (1/20) limit following its purchase of shares on 6 February, 2008 and was 5.26%. Shareholder agreements The company is not aware of any mutual shareholder agreements between its shareholders relating to the operations or ownership of the company. Market guarantee An agreement with Nordea Securities Oyj on a market guarantee for Talentum Oyj shares became effective on June 21, 2004. Under the agreement, Nordea Securities will submit a purchase and sale offer so that the maximum permitted differential between them is 3% of the purchase offer. The offers will include a minimum of 2,500 shares. Board of Directors' dividend proposal The parent company's unrestricted equity at December 31, 2008 consisted of EUR 89,593,601.28 from the reserve for non-restricted equity account, treasury shares account -2,834,420.30 and retained earnings of EUR 4,710,773.87 of which the earnings from the period under review were EUR 2,690,452.73. The profit and the retained earnings of the parent company were reduced by the impairment loss of EUR 5.1 million from Talentum Premedia's subsidiary shares. This actualized when the last remaining premedia company Faktor Oy was divested on the final quarter of the year. The Board of Directors proposes that for 2008 a dividend of EUR 0.04 per share be distributed from the retained earnings available to the company i.e. a total of EUR 1,744,591, and return of equity from the invested non-restricted equity fund EUR 0.06 per share i.e. a total of EUR 2.616.887. The record date for payment of the proposed dividend is April 1, 2009 and the dividend payment date will be on April 8, 2009. All shares issued on the record date, except for those controlled by the parent company, will be eligible to receive a dividend and a return of equity for 2008. Annual General Meeting 2009 Talentum Oyj's Annual General Meeting will be held on March 27, 2009 at 14.00. TABLES CONSOLIDATED INCOME STATEMENT -------------------------------------------------------------------------------- | EUR million | 10-12/ | 10-12/ | 1-12/ | 1-12/ | | | 2008 | 2007 | 2008 | 2007 | -------------------------------------------------------------------------------- | CONTINUING OPERATIONS | | | | | -------------------------------------------------------------------------------- | Net sales | 25.0 | 28.3 | 93.4 | 89.1 | -------------------------------------------------------------------------------- | Other operating income | 0.2 | 0.2 | 0.5 | 0.5 | -------------------------------------------------------------------------------- | Material and services | -3.8 | -4.5 | -15.0 | -14.4 | -------------------------------------------------------------------------------- | Employee benefit expenses | -10.7 | -11.0 | -41.6 | -38.3 | -------------------------------------------------------------------------------- | Depreciation and amortization | -0.4 | -0.4 | -1.6 | -1.3 | -------------------------------------------------------------------------------- | Other operating expenses | -6.6 | -6.6 | -24.1 | -21.7 | -------------------------------------------------------------------------------- | Operating profit | 3.7 | 6.0 | 11.5 | 13.9 | -------------------------------------------------------------------------------- | Financial income | 0.2 | 0.2 | 0.5 | 0.7 | -------------------------------------------------------------------------------- | Financial expenses | -0.2 | -0.3 | -0.8 | -1.8 | -------------------------------------------------------------------------------- | Share of results of associated | 0.1 | 0.0 | -0.4 | -0.1 | | companies | | | | | -------------------------------------------------------------------------------- | Profit before taxes | 3.8 | 5.9 | 10.8 | 12.7 | -------------------------------------------------------------------------------- | Taxes | -1.3 | -1.8 | -2.8 | -3.2 | -------------------------------------------------------------------------------- | Profit for the period, continuing | 2.5 | 4.1 | 8.1 | 9.5 | | operations | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | DISCONTINUED OPERATIONS | | | | | -------------------------------------------------------------------------------- | Profit for the period, | -0.7 | 0.5 | -2.9 | -0.3 | | discontinued operations | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 1.8 | 4.6 | 5.2 | 9.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | 1.8 | 4.4 | 5.2 | 8.8 | | company | | | | | -------------------------------------------------------------------------------- | Minority interest | 0.0 | 0.2 | 0.0 | 0.4 | -------------------------------------------------------------------------------- | Basic and diluted * | | | | | -------------------------------------------------------------------------------- | Earnings per share, EUR | 0.04 | 0.10 | 0.12 | 0.20 | -------------------------------------------------------------------------------- | Earnings per share, continuing | 0.06 | 0.10 | 0.19 | 0.22 | | operations, EUR | | | | | -------------------------------------------------------------------------------- | Earnings per share, discontinued | -0.02 | 0.00 | -0.07 | -0.02 | | operations, EUR | | | | | -------------------------------------------------------------------------------- *) Earnings per share are calculated on the basis of the profit accruing to the owners of the parent company. CONSOLIDATED BALANCE SHEET -------------------------------------------------------------------------------- | EUR million | 31.12.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Property, plant and equipment | 1.6 | 6.6 | -------------------------------------------------------------------------------- | Goodwill | 20.0 | 32.5 | -------------------------------------------------------------------------------- | Other intangible assets | 11.3 | 11.8 | -------------------------------------------------------------------------------- | Investments in associates | 0.3 | 2.1 | -------------------------------------------------------------------------------- | Available-for-sale investments | 0.1 | 0.1 | -------------------------------------------------------------------------------- | Deferred tax assets | 0.5 | 1.0 | -------------------------------------------------------------------------------- | Receivables | 1.6 | 0.7 | -------------------------------------------------------------------------------- | Total non-current assets | 35.4 | 54.9 | -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Inventories | 1.3 | 4.4 | -------------------------------------------------------------------------------- | Trade and other receivables | 7.2 | 15.8 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 5.7 | 13.8 | -------------------------------------------------------------------------------- | Total current assets | 14.2 | 34.1 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 49.7 | 89.0 | -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | -------------------------------------------------------------------------------- | Equity attributable to shareholders of the | | | | parent | | | -------------------------------------------------------------------------------- | Share capital | 18.6 | 18.6 | -------------------------------------------------------------------------------- | Share premium reserve | 0.0 | 5.9 | -------------------------------------------------------------------------------- | Treasury shares | -2.8 | -1.3 | -------------------------------------------------------------------------------- | Translation differences | -2.5 | -0.2 | -------------------------------------------------------------------------------- | Invested non-restricted equity fund | 5.9 | 0.0 | -------------------------------------------------------------------------------- | Retained earnings | 3.0 | 7.4 | -------------------------------------------------------------------------------- | Total | 22.2 | 30.3 | -------------------------------------------------------------------------------- | Minority interest | 0.1 | 1.6 | -------------------------------------------------------------------------------- | Total equity | 22.3 | 31.9 | -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 3.1 | 3.1 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 0.4 | 3.8 | -------------------------------------------------------------------------------- | Pension obligations | 0.0 | 0.1 | -------------------------------------------------------------------------------- | Other non-current liabilities | 0.5 | | -------------------------------------------------------------------------------- | Provisions | 0.9 | 1.4 | -------------------------------------------------------------------------------- | Total non-current liabilities | 4.8 | 8.3 | -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 1.9 | 15.4 | -------------------------------------------------------------------------------- | Trade and other payables | 20.7 | 33.1 | -------------------------------------------------------------------------------- | Provisions | 0.1 | 0.3 | -------------------------------------------------------------------------------- | Total current liabilities | 22.6 | 48.8 | -------------------------------------------------------------------------------- | TOTAL EQUITY AND LIABILITIES | 49.7 | 89.0 | -------------------------------------------------------------------------------- Total assets of discontinued operations are included in total assets of Talentum Group in 2007. CONSOLIDATED CASH FLOW STATEMENT -------------------------------------------------------------------------------- | EUR million | 1-12/2008 | 1-12/2007 | -------------------------------------------------------------------------------- | Cash flows from operating activities, | | | | continuing operations | | | -------------------------------------------------------------------------------- | Operating profit | 11.5 | 13.9 | -------------------------------------------------------------------------------- | Adjustments to operating profit | 0.3 | 2.1 | -------------------------------------------------------------------------------- | Change in working capital | 0.9 | -2.2 | -------------------------------------------------------------------------------- | Financial items and taxes | -2.3 | -0.8 | -------------------------------------------------------------------------------- | Net cash from operating activities | 10.5 | 12.9 | -------------------------------------------------------------------------------- | Cash flows from investing activities, | | | | continuing operations | | | -------------------------------------------------------------------------------- | Acquisitions of subsidiaries and | | -6.2 | | associates, net of cash | | | -------------------------------------------------------------------------------- | Disposal of subsidiaries and associates, | | 0.8 | | net of cash | | | -------------------------------------------------------------------------------- | Acquisition of property, plant and | -2.4 | -0.3 | | equipment and intangible assets | | | -------------------------------------------------------------------------------- | Other items | -0.1 | 0.4 | -------------------------------------------------------------------------------- | Net cash from investing activities | -2.5 | -5.3 | -------------------------------------------------------------------------------- | Cash flow from financing activities, | | | | continuing operations | | | -------------------------------------------------------------------------------- | Change in current loans | -14.0 | -6.0 | -------------------------------------------------------------------------------- | Proceeds from non-current loans | | 1.4 | -------------------------------------------------------------------------------- | Repayment of non-current loans | -1.0 | -0.7 | -------------------------------------------------------------------------------- | Dividends paid | -8.8 | -8.0 | -------------------------------------------------------------------------------- | Purchase of treasury shares | -1.5 | | -------------------------------------------------------------------------------- | Other items | | 0.1 | -------------------------------------------------------------------------------- | Net cash in financing activities | -25.3 | -13.2 | -------------------------------------------------------------------------------- | Discontinued operations | | | -------------------------------------------------------------------------------- | Net cash from operating activities | -2.2 | 1.7 | -------------------------------------------------------------------------------- | Net cash from investing activities | 12.4 | -1.5 | -------------------------------------------------------------------------------- | Net cash from financing activities | -0.5 | -1.2 | -------------------------------------------------------------------------------- | Cash flow from discontinued operations | 9.8 | -1.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash and cash equivalents | -7.5 | -6.6 | -------------------------------------------------------------------------------- | Cash and cash equivalents at 1 January | 13.8 | 20.4 | -------------------------------------------------------------------------------- | Foreign exchange adjustment | -0.6 | 0.0 | -------------------------------------------------------------------------------- | Net change in cash and cash equivalents | -7.5 | -6.6 | -------------------------------------------------------------------------------- | Cash and cash equivalents at 31 December | 5.7 | 13.8 | -------------------------------------------------------------------------------- Change in cash flow of disposals of subsidiaries is included in net cash from investing activities of discontinued operations. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY -------------------------------------------------------------------------------- | EUR | Share | Shar | Trans | Invest | Retain | Before | Minor | Total | | million | capita | e | latio | ed | ed | minor | ity | equity | | | l | pre | n | non-re | earnin | ity | inter | | | | | mium | diffe | stric | gs | | est | | | | | re | rence | ted | | | | | | | | serv | s | equity | | | | | | | | e | | fund | | | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 5.9 | -0.2 | 0.0 | 6.1 | 30.3 | 1.6 | 31.9 | | at 1 | | | | | | | | | | January | | | | | | | | | | 2008 | | | | | | | | | -------------------------------------------------------------------------------- | Share | | -5.9 | | 5.9 | | | | | | premium | | | | | | | | | | reductio | | | | | | | | | | n and | | | | | | | | | | transfer | | | | | | | | | -------------------------------------------------------------------------------- | Change | | | -2.3 | | -0.7 | -3.0 | | -3.0 | | in | | | | | | | | | | translat | | | | | | | | | | ion | | | | | | | | | | differen | | | | | | | | | | ces | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | -0.1 | -0.1 | -0.1 | -0.2 | | items | | | | | | | | | -------------------------------------------------------------------------------- | Divestme | | | | | | | -1.3 | -1.3 | | nt of | | | | | | | | | | companie | | | | | | | | | | s | | | | | | | | | -------------------------------------------------------------------------------- | Profit | | | | | 5.2 | 5.2 | 0 | 5.2 | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total | | -5.9 | -2.3 | 5.9 | 4.5 | 2.2 | -1.5 | 0.7 | | recogniz | | | | | | | | | | ed | | | | | | | | | | income | | | | | | | | | | and | | | | | | | | | | expenses | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | -8.8 | -8.8 | | -8.8 | | s paid | | | | | | | | | -------------------------------------------------------------------------------- | Purchase | | | | | -1.5 | -1.5 | | -1.5 | | of | | | | | | | | | | treasury | | | | | | | | | | shares | | | | | | | | | -------------------------------------------------------------------------------- | Share-ba | | | | | | | | | | sed | | | | | | | | | | payments | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 0 | -2.5 | 5.9 | 0.2 | 22.1 | 0.1 | 22.3 | | at 31 | | | | | | | | | | December | | | | | | | | | | 2008 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | 18.6 | 5.9 | 0.5 | 0.0 | 5.4 | 30.5 | 1.7 | 32.2 | | at 1 | | | | | | | | | | January | | | | | | | | | | 2007 | | | | | | | | | -------------------------------------------------------------------------------- | Change | | | -0.8 | | -0.2 | -1.0 | | -1.0 | | in | | | | | | | | | | translat | | | | | | | | | | ion | | | | | | | | | | differen | | | | | | | | | | ces | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | -0.2 | -0.2 | -0.2 | -0.4 | | items | | | | | | | | | -------------------------------------------------------------------------------- | Profit | | | | | 8.8 | 8.8 | 0.4 | 9.2 | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | -0.8 | | 8.4 | 7.6 | 0.2 | 7.8 | | recogniz | | | | | | | | | | ed | | | | | | | | | | income | | | | | | | | | | and | | | | | | | | | | expenses | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | -7.9 | -7.9 | -0.3 | -8.2 | | s paid | | | | | | | | | -------------------------------------------------------------------------------- | Share-ba | | | | | 0.2 | 0.2 | | 0.2 | | sed | | | | | | | | | | payments | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 5.9 | -0.2 | 0.0 | 6.1 | 30.3 | 1.6 | 31.9 | | at 31 | | | | | | | | | | December | | | | | | | | | | 2007 | | | | | | | | | -------------------------------------------------------------------------------- The change in the number of shares is detailed in the notes to the financial statements. APPENDICES The interim report of Talentum Group has been drawn up following the IFRS standards on recording and valuation principles, but not all of the IAS 34 Interim Financial Reporting Standard requirements have been followed in drawing it up. With the exception of the additions described in the following paragraph, Talentum has applied the same accounting principles in drawing up this interim report as in the financial statements for the 2007 financial year. The Group has capitalized the online operations' development costs on the balance sheet on intangible assets. The expenses related to the research phase of the projects have been recorded as expenses in the income statement as they have been incurred. Development costs have been capitalized when the asset is regarded as technically feasible, commercially exploitable and it is expected to produce a corresponding financial benefit. The economic life of intangible consisting of online services resulting from development activities is generally two years. However, the economic life of intangible assets resulting from information operations is three years. Most of the development expenses consist of external services. In addition, Talentum adopted the following new IFRIC interpretations with effect from January 1, 2008: IFRIC 11 Group and Treasury Share Transactions as well as IFRIC 14 IAS 19 - The limit on a defined benefit asset minimum funding requirements and their interaction. The adoption of the interpretations has not had an effect on Talentum's financial statement. The other new interpretations are not relevant from the perspective of the Group. All the figures in the report are rounded and therefore the sums of individual figures may differ from the sums presented. TALENTUM GROUP BY BUSINESS AREA, CONTINUING OPERATIONS -------------------------------------------------------------------------------- | EUR million | 10-12/ | 10-12/ 2007 | 1-12/ 2008 | 1-12/ 2007 | | | 2008 | | | | -------------------------------------------------------------------------------- | Net sales | | | | | -------------------------------------------------------------------------------- | Publishing | 23.5 | 27.0 | 87.7 | 83.8 | -------------------------------------------------------------------------------- | Direct marketing | 2.3 | 2.5 | 9.8 | 9.5 | -------------------------------------------------------------------------------- | Adjustments and | -0.9 | -1.1 | -4.2 | -4.2 | | eliminations | | | | | -------------------------------------------------------------------------------- | Total | 25.0 | 28.3 | 93.4 | 89.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | | | | | -------------------------------------------------------------------------------- | Publishing | 4.1 | 6.3 | 12.5 | 14.8 | -------------------------------------------------------------------------------- | Direct marketing | 0.2 | 0.4 | 1.1 | 1.3 | -------------------------------------------------------------------------------- | Adjustments and | -0.6 | -0.7 | -2.1 | -2.3 | | eliminations | | | | | -------------------------------------------------------------------------------- | Total | 3.7 | 6.0 | 11.5 | 13.9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit before | 3.7 | 5.4 | 11.5 | 13.2 | | non-recurring items | | | | | -------------------------------------------------------------------------------- | Publishing | | | | | -------------------------------------------------------------------------------- | Reduction of Swedish | | -0.6 | | -0.6 | | advertisement tax | | | | | -------------------------------------------------------------------------------- GROUP COMPANIES SOLD DURING THE PERIOD UNDER REVIEW The effect of the sale of the shares in Varesvuo Partners companies on the Group's financial position In February, the Group sold the Varesvuo Partners sub-group, which concentrates on TV content production, except for its shares in its subsidiary, Oy Filmiteollisuus Fine Ab, and the companies it owns, which were sold in March. The Varesvuo Partners sub-group was not included in the January - March figures for the Talentum Group except for the Oy Filmiteollisuus Fine Ab sub-group with a zero income. The whole of the Varesvuo Partners sub-group was classed as a discontinued operation in January. The main operating areas of the Varesvuo Partners companies are television programme production as well as advertisement film production and its customers are TV channels and advertising agencies. Talentum concentrates on publishing operations directed towards professionals, and TV production and advertising films were no longer seen as having synergies with the core business operations. Revenues for the January - December 2008 period include a disposal profit from the Varesvuo Partners sub-group of EUR 0.8 million and a disposal loss from the sale of Oy Filmiteollisuus Fine Ab, which was separated from the sub-group and sold separately in March, of EUR 0.4 million. The effect of the sale of the shares in Premedia companies on the Group's financial position In addition the Group also sold all its shares in DH Tools Oy in February. The company focuses on the digital management of material and was part of the Premedia business operation. DH Tools Oy's main operation is supplying digital systems for marketing to companies. There were 16 people working for the company at the time it was sold. In April, the Group sold all its shares in Sata-Flexo Oy and Marvaco Oy, part of its Premedia operation involved in producing printed surfaces for packaging. There were about 40 people working for the companies. In November, the Group sold all its shares in Faktor Oy which was part of its Premedia operations. Faktor Oy's main activity is producing advertisements and pages. There were 36 people working for the company at the time it was sold. The sales were part of the Group's strategy to dispose of operations that are not part of its core business operations. The effect of the sales on Group income is a total of EUR -0.5 million. The Varesvuo Partners companies and the companies that were part of the Premedia operation are classified as discontinued operations. Financial performance of discontinued operations -------------------------------------------------------------------------------- | EUR million | 1-12/2008 | 1-12/2007 | -------------------------------------------------------------------------------- | Revenue | 6.0 | 36.5 | -------------------------------------------------------------------------------- | Costs | -8.7 | -36.3 | -------------------------------------------------------------------------------- | Taxes | -0.1 | -0.5 | -------------------------------------------------------------------------------- | Profit after taxes | -2.9 | -0.3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, discontinued | -0.07 | -0.02 | | operations | | | -------------------------------------------------------------------------------- The effect of the sales of discontinued operations on the Group's financial position -------------------------------------------------------------------------------- | EUR million | 31.12.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | Property, plant and equipment | 4.2 | 0.4 | -------------------------------------------------------------------------------- | Goodwill | 7.2 | | -------------------------------------------------------------------------------- | Other intangible assets | 0.5 | 0.1 | -------------------------------------------------------------------------------- | Investments in associates | 1.6 | | -------------------------------------------------------------------------------- | Inventories | 3.3 | 0.1 | -------------------------------------------------------------------------------- | Current receivables | 4.8 | 0.3 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 2.0 | | -------------------------------------------------------------------------------- | Minority interest | -1.3 | | -------------------------------------------------------------------------------- | Non-current liabilities | -0.3 | | -------------------------------------------------------------------------------- | Current liabilities | -7.4 | | -------------------------------------------------------------------------------- | Total assets and liabilities | 14.6 | 0.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consideration received in cash | 14.5 | 0.2 | -------------------------------------------------------------------------------- | Cash disposed of | 2.0 | | -------------------------------------------------------------------------------- | Net cash inflow | 12.5 | 0.2 | -------------------------------------------------------------------------------- Change in cash flow of disposals of subsidiaries is included in net cash from investing activities of discontinued operations. CHANGE IN NUMBER OF SHARES -------------------------------------------------------------------------------- | | 1-12/2008 | 1-12/2007 | -------------------------------------------------------------------------------- | 1,000 | | | -------------------------------------------------------------------------------- | Shares outstanding at beginning of | 44 040 | 44 040 | | period | | | -------------------------------------------------------------------------------- | Share issue | 75 | - | -------------------------------------------------------------------------------- | Acquisition of own shares | -500 | - | -------------------------------------------------------------------------------- | Number of shares outstanding at end | 43 615 | 44 040 | | of period | | | -------------------------------------------------------------------------------- The directed free share issue was the shares granted to the company's management for achieving the objectives set for 2007 through Talentum Oyj's equity based incentive plan. In accordance with the authorizations given, the company had acquired 500,000 by December 31, 2008 for use in corporate structuring or similar or for cancellation. At the end of the period under review the Group controlled a total of 681,000 of its own shares. In calculating the earnings per share for the period under review, the weighted average number of shares in issue during the period was 43,775,710 (44,039,817 from January - December 2007). AVERAGE NUMBER OF STAFF, CONTINUING OPERATIONS -------------------------------------------------------------------------------- | | 1-12/2008 | 1-12/2007 | -------------------------------------------------------------------------------- | Publishing | 430 | 384 | -------------------------------------------------------------------------------- | Direct marketing | 374 | 365 | -------------------------------------------------------------------------------- | Group Administration | 14 | 14 | -------------------------------------------------------------------------------- | Continuing operations | 818 | 763 | -------------------------------------------------------------------------------- CONTINGENT LIABILITIES AND OTHER COMMITMENTS -------------------------------------------------------------------------------- | EUR million | 31.12.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | Guarantees posted for own commitments | | | -------------------------------------------------------------------------------- | Financial institution loans | 0.5 | 2.8 | -------------------------------------------------------------------------------- | Book value of shares pledged | 2.3 | 7.7 | -------------------------------------------------------------------------------- | Mortgaged real estates | 0.3 | 0.4 | -------------------------------------------------------------------------------- CHANGE IN PROPERTY, PLANT AND EQUIPMENT -------------------------------------------------------------------------------- | EUR million | 31.12.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | Carrying value at start of period | 6.6 | 7.9 | -------------------------------------------------------------------------------- | Additions | 0.6 | 1.5 | -------------------------------------------------------------------------------- | Disposals through disposals of | -4.5 | -0.4 | | subsidiaries | | | -------------------------------------------------------------------------------- | Disposals | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Depreciation for the period | -1.0 | -2.5 | -------------------------------------------------------------------------------- | Carrying value at end of period | 1.6 | 6.6 | -------------------------------------------------------------------------------- RELATED PARTY TRANSACTIONS -------------------------------------------------------------------------------- | EUR million | 31.12.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | Management employee benefits | 1.6 | 2.4 | -------------------------------------------------------------------------------- | Support payments to pension fund | 5.6 | 3.8 | -------------------------------------------------------------------------------- | Associates and joint ventures: | | | -------------------------------------------------------------------------------- | Sales | 0.2 | 0.3 | -------------------------------------------------------------------------------- | Purchases | | 0.5 | -------------------------------------------------------------------------------- | Current receivables | 0.0 | 0.1 | -------------------------------------------------------------------------------- | Current liabilities | 0.5 | 0.5 | -------------------------------------------------------------------------------- Calculation principles for key indicators Earnings per share = Profit accruing to owners of the parent company/Average number of share issue adjusted shares for the period Owners' equity per share = Owners' equity accruing to owners of the parent company / Number of shares corrected for share issue at the end of the period Return on capital invested % = Profit before tax + interest and other financing expenses / Balance sheet total - non-interest bearing debt (average between start and end of year) x 100 Return on equity % = Profit for the period / Total equity (average between start and end of year) x 100 Equity ratio % = Equity / Balance sheet total - prepayments received x 100 Gearing ratio % = Interest bearing debt - liquid assets / Total equity x 100 Market capitalization = Number of shares issued at year end x share price at year end The figures in the bulletin are not audited. The forecasts and estimates presented here are based on the management's current view of financial developments, and the actual results may differ significantly from those currently anticipated by the company. TALENTUM OYJ Juha Blomster CEO APPENDICES CEO Juha Blomster, Telephone +358 40 342 4444 CFO Kaisa Kokkonen, Telephone +358 40 342 4212 DISTRIBUTION NASDAQ OMX Helsinki Principal media BRIEFING A briefing for analysts and media will be held today February 12, 2009 at 10.00 in the Talentum Building, Annankatu 34-36 B, Kamppi, Helsinki. The financial results will be presented by CEO Juha Blomster and CFO Kaisa Kokkonen. TALENTUM OYJ Annankatu 34 - 36 B 00100 HELSINKI Telephone +358 20 442 40 www.talentum.com
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