2008-07-23 07:30:00 CEST
2008-07-23 07:30:02 CEST
REGULATED INFORMATION
Talentum Oyj - Interim report (Q1 and Q3)
TALENTUM INTERIM REPORT JANUARY-JUNE 2008
TALENTUM OYJ INTERIM REPORT JULY 23, 2008 AT 8.30 AM TALENTUM INTERIM REPORT JANUARY-JUNE 2008 FOCUSING ON CORE OPERATIONS BRINGS RESULTS April-June 2008 in brief - Consolidated net sales amounted to EUR 27.1 million (EUR 25.6 million). - Publishing's net sales went up by 18.6%. - Operating profit (EBIT) EUR 2.7 million (EUR 0.9 million). - Publishing performed as expected in Finland, but in Sweden integration expenses MEUR 0.5 million hampered profit. - The net sales for online business increased by 106% from EUR 1.4 million to 2.9 million, expenses EUR 0.4 million over the previous year. - Earnings per share EUR 0.04 (EUR 0.01). January-June 2008 in brief - Consolidated net sales amounted to EUR 53.8 million (EUR 51.9 million). - Operating profit (EBIT) EUR 6.3 million (EUR 4.9 million). - Earnings per share EUR 0.09 (EUR 0.08). - Non-core operations divested. KEY INDICATORS, CONTINUING OPERATIONS *) -------------------------------------------------------------------------------- | EUR million | 4-6/ | 4-6/ | Change | 1-6/ | 1-6/ | Change | 1-12/ | | | 2008 | 2007 | % | 2008 | 2007 | % | 2007 | -------------------------------------------------------------------------------- | Net sales | 27.1 | 25.6 | 6.0 | 53.8 | 51.9 | 3.7 | 101.2 | -------------------------------------------------------------------------------- | Operating | 2.7 | 0.9 | 198.1 | 6.3 | 4.9 | 28.3 | 12.7 | | profit | | | | | | | | -------------------------------------------------------------------------------- | as % of net | 10.0 | 3.5 | | 11.8 | 9.5 | | 12.6 | | sales | | | | | | | | -------------------------------------------------------------------------------- | Operating | 2.7 | 2.6 | 3.8 | 6.3 | 6.6 | -4.5 | 13.8 | | profit without | | | | | | | | | non-recurring | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | as % of net | 10.0 | 10.2 | | 11.8 | 12.8 | | 13.6 | | sales | | | | | | | | -------------------------------------------------------------------------------- | Total assets | | | | 62.8 | 94.8 | -33.7 | 89.0 | -------------------------------------------------------------------------------- | Investments | 0.6 | 4.0 | -84.5 | 1.2 | 4.8 | -74.5 | 10.8 | -------------------------------------------------------------------------------- | as % of net | 2.3 | 15.7 | | 2.3 | 9.3 | | 10.7 | | sales | | | | | | | | -------------------------------------------------------------------------------- | Equity ratio % | | | | 38.9 | 29.7 | | 36.7 | -------------------------------------------------------------------------------- | Gearing ratio, | | | | -6.5 | 29.2 | | 16.7 | | % (net debt to | | | | | | | | | equity) | | | | | | | | -------------------------------------------------------------------------------- | Interest-bearin | | | | 7.4 | 30.6 | -75.8 | 19.2 | | g liabilities | | | | | | | | -------------------------------------------------------------------------------- | Net interest- | | | | -1.6 | 8.0 | -120.0 | 5.3 | | bearing | | | | | | | | | liabilities | | | | | | | | -------------------------------------------------------------------------------- | Personnel on | | | | 862 | 892 | -3.4 | 896 | | average | | | | | | | | -------------------------------------------------------------------------------- | Earnings per | 0.04 | 0.01 | 209.5 | 0.09 | 0.08 | 13.7 | 0.19 | | share, EUR | | | | | | | | -------------------------------------------------------------------------------- | Cash flow from | 0.11 | 0.13 | -13.5 | 0.12 | 0.21 | -41.9 | 0.30 | | operating | | | | | | | | | activities per | | | | | | | | | share, EUR | | | | | | | | -------------------------------------------------------------------------------- | Equity per | | | | 0.56 | 0.58 | -4.7 | 0.69 | | share, EUR | | | | | | | | -------------------------------------------------------------------------------- | Market | | | | 129.1 | 149.7 | -13.8 | 121.1 | | capitalization | | | | | | | | | on closing rate | | | | | | | | | at period end | | | | | | | | -------------------------------------------------------------------------------- *) These figures do not include TV content production. CEO JUHA BLOMSTER: “Talentum's net sales increased by 4% in the first half of the year, despite divesting certain premedia businesses. Operating profit is up by 28%, and the operating profit percentage was almost 12. “Publishing's net sales increased by about 15% in April-June, bringing the total increase in January-June to almost 20%. Despite major investment in online operations and new products, the operating profit in Publishing remained at last year's level. Operations in Sweden did not develop as expected in the second quarter, however, we estimate the performance to develop more positively on the latter half of the year. “Net sales in online operations increased by 106% in the first half of the year. Investment in circulation sales has been productive, and magazine circulation figures have increased. Advertising sales for magazines increased by 5% in Finland and 8% in Sweden, and circulation revenue increased by 5% in both countries. “The diversification of our publishing earning structure, a central goal of ours, is progressing well. We are also investing in our training business, trusting that the product names Talentum Legal Training and Talentum Training will help profile our services for a broader customer base and link them to our other products, generating synergy benefits in sales and marketing. The net sales of our book publishing, training and information services almost doubled in the second quarter, and the growth from the beginning of this year has been almost 50%. “The competitiveness and success of Talentum's products are based on quality that is being constantly developed. In early May, Talentum introduced a new online ad option for advertisers, allowing better targeting of ads to content, thus serving both advertisers and readers. Our online services are being updated, the latest development being the appearance of Arvopaperi.fi, a securities website whose stock exchange service is shared with Talouselama.fi. “According to the TNS PäättäjäAtlas survey of decision-makers published in May, Talentum media have increased their readership among decision-makers. Talouselämä magazine attained the leading position among financial media with a readership of 85,000 among corporate decision-makers. Tekniikka & Talous has 44,000, and these two magazines together reach almost 60% of Finnish decision-makers. In Sweden, the Orvesto Näringsliv 2008 reader poll showed that Affärsvärlden is performing better than its competitors, with a readership of 62,000, and that Ny Teknik has increased its corresponding figure to 152,000. “In its strategy of focusing on its core operations, Talentum has moved even more quickly than we had anticipated. In the first half of this year, we sold our TV content production and Premedia functions related to digital content management and package printing materials. Almost 100% of our net sales is now derived from our core operations, and we can focus all our resources on its development. “In accordance with our strategy, we are also looking at growth options through corporate acquisition. We have set goals for the near future, keeping in mind the primary goal of increasing owner value.” Operating environment and seasonal variations The general economic situation has clearly deteriorated in Finland and Sweden during the second quarter. GDP growth predictions for the current year have decreased as the year has progressed. Financial insecurity is expected to increase towards the end of the year. According to TNS Gallup, media advertising in Finland grew by 3.3% in January-June. Second-quarter figures for Sweden are not available, but the growth estimate for media advertising in Sweden for the entire year is 3.1% (Institutet för Reklam- och Mediestatistik). Job advertising continued to increase in January-June in both Finland and Sweden. According to the Finnish Audit Bureau of Circulations, the circulation of every other magazine that it examined increased slightly or remained stable. The advent of new magazines onto the market and investment by old magazines in marketing their circulation were characteristic of the period examined. Growth in the circulation of special-interest magazines was also typical. Talentum's business operations are subject to seasonal variations. In the spring, the Easter break falls in the first or second quarter, and this has an effect on the financial performance of these two periods. However, the first half of the year as a whole is comparable. 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. Business is at its liveliest during the final quarter of the year. The majority of book sales typically occur in the final quarter. Consolidated net sales and financial performance April-June The consolidated net sales recorded by Talentum's continuing operations in April-June amounted to EUR 27.1 million (EUR 25.6 million). Publishing's net sales went up by 18.6% to EUR 24.4 million (EUR 20.6 million). The business operations acquired in Sweden in 2007 accounted for EUR 2.4 million of the growth in net sales. Premedia's net sales fell as a result of corporate restructuring. This year, the comparability of Publishing's net sales is affected by the Easter break falling in the first quarter. However, the first half of the year is comparable with the same period last year in this respect. The consolidated operating profit of the continuing operations in April-June amounted to EUR 2.7 million (EUR 0.9 million), i.e. 10.0% of the net sales (3.5%). Publishing's operating profit was EUR 3.1 million (EUR 2.9 million). The profitability was weakened by functions acquired in Sweden in 2007 and by new magazines founded. In the comparison period Premedia's profit included a non-recurring cost of MEUR 1.7 million as a result of restructuring. Net financial expenses amounted to EUR -0.1 million (EUR -0.2 million). Associated companies contributed EUR 0.2 million (EUR 0.0 million) to the financial performance. The profit of continuing operations before taxes was EUR 2.8 million (EUR 0.7 million). Consolidated net sales and financial performance January-June The consolidated net sales recorded by Talentum's continuing operations in January-June amounted to EUR 53.8 million (EUR 51.9 million). Publishing's net sales went up by 14.5% to EUR 47.5 million (EUR 41.5 million). The business operations acquired in Sweden in 2007 accounted for EUR 4.6 million of the growth in net sales. Premedia's net sales fell by EUR 4.3 million as a result of corporate divestment. The consolidated operating profit of the continuing operations in January-June amounted to EUR 6.3 million (EUR 4.9 million), i.e. 11.8% of the net sales (9.5%). Publishing's operating profit was EUR 6.7 million (EUR 6.8 million). The comparability of this figure is affected by functions acquired in 2007 in Sweden, to a total of about EUR -1.0 million. Premedia improved its financial performance on the last year as a result of corporate restructuring. TV content production, sold off in the first quarter, was classified as a discontinued operation as of January. The impact of TV content production on financial performance is given in whole under discontinued operations in the income statement. The sale of the major part of TV content production resulted in a sales profit of EUR 0.8 million, while the sale of Oy Filmiteollisuus Fine Ab caused a sales loss of EUR 0.4 million. Net financial expenses amounted to EUR -0.3 million (EUR -0.3 million). Associated companies contributed EUR -0.3 million (EUR -0.1 million) towards the financial performance, an amount that includes not only the performance in the period under review but also EUR 0.3 million from an associated company's losses that were incurred in the previous financial period but detected after the balance sheet date. The profit of continuing operations before taxes was EUR 5.8 million (EUR 4.6 million). The sector's and Talentum's prospects for 2008 The uncertainty in the economic situation has increased towards the summer, and the latest economic forecasts in particular have been downwards. This means that attaining goals set previously will probably be more challenging than anticipated. Nevertheless, Talentum is keeping the forecast for the entire year unchanged and expects the net sales of the core operations to increase over the previous year and the operating profit to improve in 2008 in spite of the costs of integrating the acquired businesses and developing the online business. Risks to business operations in the near future The biggest risk to the Group's business operations is associated with product and job advertising, which is sensitive to economic trends. About 40% of the consolidated net sales are tied to advertising at the annual level. We endeavour to control this market risk by increasing revenue from circulation sales and content sales. Cash flow, financial position and balance sheet The cash flow from business operations in January-June was EUR 5.3 million (EUR 9.3 million). The change in working capital was EUR 0.1 million (EUR 3.1 million). The consolidated balance sheet total was reduced considerably as a result of the sale of TV content production and at the end of June stood at EUR 62.8 million (EUR 89.0 million on 31 December 2007). Interest-bearing net liabilities were EUR -1.6 million (EUR 5.3 million). The Group's liquid assets, EUR 9.0 million (EUR 13.8 million), have been invested mostly in financial instruments. The consolidated loans and borrowing amounted to EUR 7.4 million (EUR 19.2 million). At the end of the period under review, there were commercial papers outstanding to the value of EUR 4.0 million (EUR 14.0 million). In order to minimize the Group's liquidity risk, Talentum Oyj agreed on a current account credit facility of EUR 12.0 million for the Group for three years in February and a financial credit facility of EUR 20.0 million. Of the financial credit facilities, loans can be withdrawn or paid back within the framework of the rules during the limit's maturity time of three years. The limits had not been used as at 30 June 2008. The equity ratio was 38.9% at the end of June (36.7% on 31 December 2007). The Group's equity per share was EUR 0.56 (EUR 0.69 on 31 December 2007). Investment Gross investment in tangible and intangible assets in continuing operations in January-June totalled EUR 1.2 million (EUR 4.8 million), i.e. 2.3% (9.3%) of net sales. Investment in the comparable period includes the acquisition of Dagens Media. Of the investment, EUR 0.8 million was spent on developing online business recognized as an asset, and the rest comprised normal replacement and maintenance investment, such as procuring equipment, software and fixtures. Group restructuring On 22 January 2008, Talentum Oyj and CapMan Plc agreed that a company established by the CapMan Buyout VIII Fund, which is managed by CapMan Plc, would purchase the major part of Varesvuo Partners Oy, which focuses on TV content production. The transaction was concluded on 20 February 2008. The sub-group Oy Filmiteollisuus Fine Ab was sold on 28 March 2008 to Yellow Film & TV Oy, which is owned by members of the executive management of Oy Filmiteollisuus Ab. TV content production's net sales in 2007 amounted to EUR 22.9 million, and it employed 95 people. The operating result of TV content production, apart from the Oy Filmiteollisuus Fine Ab sub-group, is not included in the Group's financial performance for January-June 2008. The sales profit created by the transactions and the financial performance of TV content production are shown under discontinued operations in the income statement for January-June 2008 and for 2007. Most of the Premedia functions were divested in accordance with the strategy. In February, the Talentum Group sold the entire shareholding of DH Tools Oy, which focused on digital data management, and in April it sold the entire shareholding of Sata-Flexo Oy and Marvaco Oy, companies in the package printing materials function. Personnel During January-June, the Talentum Group employed an average of 862 (892) people. Geographically, the personnel were divided as follows: Finland 492 people (580), Sweden 187 (120), Latvia 80 (75), Lithuania 28 (20), Estonia 67 (82) and Russia 8 (15). BUSINESS AREAS Publishing -------------------------------------------------------------------------------- | EUR million | 4-6/2008 | 4-6/2007 | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | | | | | | -------------------------------------------------------------------------------- | Advertising | 11.9 | 11.4 | 23.5 | 22.1 | 42.6 | | revenue | | | | | | -------------------------------------------------------------------------------- | Circulation | 6.6 | 6.2 | 12.8 | 12.1 | 24.3 | | revenue | | | | | | -------------------------------------------------------------------------------- | Other revenue | 5.9 | 3.0 | 11.2 | 7.3 | 16.9 | -------------------------------------------------------------------------------- | Total | 24.4 | 20.6 | 47.5 | 41.5 | 83.8 | -------------------------------------------------------------------------------- * ‘Other revenue' includes books, training and information services. April-June Publishing's net sales in April-June amounted to EUR 24.4 million (EUR 20.6 million), an increase of 18.6% over the previous year. The business operations acquired in Sweden during 2007 brought net sales of EUR 2.4 million. Advertising revenue rose by 5% in Finland and by 5% in Sweden. Recruitment advertising continued strong in Talentum media in both Finland and Sweden. The circulation revenue from Talentum's magazines grew by 4% in Finland and 8% in Sweden. The net sales of other content sales are increased by the acquisition of Talentum Fakta in November 2007. Online business showed a growth of 106% in the second quarter, totalling 12% of Publishing's net sales at EUR 2.9 million (EUR 1.4 million). This year, the comparability of Publishing's net sales is affected by the Easter break falling in the first quarter. However, the first half of the year is comparable with the same period last year in this respect. Publishing's operating profit (EBIT) was EUR 3.1 million (EUR 2.9 million). In Finland, Publishing performed as expected. In Sweden, on the other hand, profit was weakened by the integration costs of Talentum Fakta and Dagens Media, and the costs of launching a new magazine, which were higher than anticipated in the period under review. Planned investment in online operations resulted in costs about EUR 0.4 million higher than a year earlier, and also EUR 0.5 million was recognized in assets during the period under review. The investment now made in increasing circulation sales will translate into profit in the future. January-June Publishing's net sales in January-June amounted to EUR 47.5 million (EUR 41.5 million), an increase of 14.5% over the previous year. The business operations acquired in Sweden during 2007 brought net sales of EUR 4.6 million. The circulation revenue from Talentum's magazines grew by 6% in Finland and 6% in Sweden. Advertising revenue rose by 5% in Finland and 8% in Sweden. Online business showed a growth of 106%, totalling 12% of Publishing's net sales at EUR 5.9 million (EUR 2.9 million). Publishing's operating profit (EBIT) was EUR 6.7 million (EUR 6.8 million). The financial performance of the business operations acquired in Sweden during 2007 did not attain the goals set. Operating profit in companies acquired and magazines launched during 2007 was EUR -1.0 million. In Publishing investment in online operations resulted in costs about EUR 0.8 million higher than a year earlier, and also EUR 0.8 million in development costs were recognized as assets during the period under review. Online operations development is weighted toward the first half of the year. Publishing's net sales and operating profit by country -------------------------------------------------------------------------------- | EUR million | 4-6/2008 | 4-6/2007 | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | | | | | | -------------------------------------------------------------------------------- | Finland | 14.0 | 12.8 | 28.2 | 27.0 | 53.9 | -------------------------------------------------------------------------------- | Sweden and | 10.4 | 7.8 | 19.3 | 14.5 | 29.9 | | other | | | | | | -------------------------------------------------------------------------------- | Total | 24.4 | 20.6 | 47.5 | 41.5 | 83.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating | | | | | | | profit | | | | | | -------------------------------------------------------------------------------- | Finland | 1.9 | 1.4 | 4.9 | 4.6 | 10.6 | -------------------------------------------------------------------------------- | Sweden and | 1.2 | 1.5 | 1.8 | 2.2 | 4.2 | | other | | | | | | -------------------------------------------------------------------------------- | Total | 3.1 | 2.9 | 6.7 | 6.8 | 14.8 | -------------------------------------------------------------------------------- Direct Marketing April-June Direct Marketing's net sales in April-June amounted to EUR 2.6 million (EUR 2.4 million), and the operating profit (EBIT) was EUR 0.2 million (EUR 0.3 million). Expansion in Finland and the Baltic states increased expenses but will increase revenue in the future. January-June Direct Marketing's net sales in January-June amounted to EUR 5.2 million (EUR 4.8 million), and the operating profit (EBIT) was EUR 0.6 million (EUR 0.7 million). Net sales grew as expected. Expansion in Finland and the Baltic states increased expenses but will increase revenue in the future. Premedia April-June The net sales of the Premedia business area in April-June amounted to EUR 1.5 million (EUR 3.9 million), and the operating profit (EBIT) was EUR 0.3 million (EUR -1.4 million). The divestments of the business area have reduced net sales. The package printing materials function was sold in April. The Premedia function remaining is prepress production, which supports the core operations of the Group. The net sales and financial performance of this function have developed as expected. January-June The net sales of the Premedia business area in January-June amounted to EUR 3.8 million (EUR 8.0 million), and the operating profit (EBIT) was EUR 0.6 million (EUR -1.2 million). AGM, Board and auditor Talentum's Annual General Meeting was held on 27 March 2008. The meeting confirmed the financial statements for 1 January - 31 December 2007 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 members of the Board of Directors. Tuomo Saarinen was re-elected Chairman of the Board of Directors, and Manne Airaksinen was re-elected Deputy Chairman. Authorized Public Accountants PricewaterhouseCoopers Oy with APA Juha Wahlroos as the principal auditor were re-elected auditors. The AGM on 27 March 2008 decided, on a motion by the Board of Directors, to distribute a dividend of EUR 0.20 per share. The payment date was 8 April 2008, and the record date was 1 April 2008. Shares and share capital At the end of the period under review, Talentum Oyj's share capital totalled EUR 18,593,518.79, comprising 44,295,787 fully paid-up shares. The shares are listed on the OMX Nordic Exchange Helsinki. At the end of the period under review, the company held 681,000 company shares, representing about 1.5% of Talentum's total shares and votes. A total of 7,467,489 shares were traded during the period under review, 16.9% of the total average number of shares during the period under review. Shareholdings of the Board of Directors and CEO On 30 June 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 4,723,996, representing 10.7% 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 own shares and issue of special rights The Annual General Meeting on 27 March 2008 authorized the Board of Directors to decide on a share issue which may be either liable to charge or free of charge, including the issuing of new shares and the conveyance of own shares possibly in the company's possession. The Board of Directors has the right, by virtue of the authorization, to decide on an issue of option rights and other special rights that grant entitlement, against payment, to receive new shares or shares possibly in possession of the company. By virtue of the authorizations applying to a share issue and/or special rights, new shares may be issued and/or shares in possession of the company may be conveyed, in one or more lots, to a maximum total of 3,500,000 shares, representing approximately 8% of the issued shares of the company. The authorizations will remain in force until 30 June 2009. The Board of Directors is otherwise authorized to decide on all the terms and conditions for a share issue and the issuing of special rights, including the right to decide on a directed share issue and issue of special rights. Shareholders' pre-emptive subscription rights can be deviated from 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 own shares The Annual General Meeting on 27 March 2008 authorized the Board of Directors to decide on the acquisition of the company's own shares. The shares can be acquired for the value that is decided by the board of Directors and is based on the fair value at the time of the acquisition formed for the shares in public trading. Own shares may be only acquired with unrestricted equity. By virtue of the authorization, a maximum of 3,500,000 own shares, representing approximately 8% of the issued shares of the company, can be acquired, in one or several lots. The authorization will remain in force until 30 June 2009. The Board of Directors is otherwise authorized to decide on all the terms and conditions regarding the acquisition of own shares, including the manner of acquisition of the shares. The authorization does not exclude the right of the Board of Directors to also decide on a directed acquisition of own shares providing that there is a significant financial reason for the company to do so. Directed issue free of charge The Talentum Board of Directors decided on 8 March 2007 to set up a share-based incentive plan for the Group management. The Annual General Meeting on 27 March 2007 gave the Board authorization to decide on a share issue that would be liable to charge and/or free of charge. The Board has decided to issue to the people coming under the share-based incentive plan rewards in shares specified according to the terms and conditions of the plan in question in the form of a directed share issue free of charge, incorporating in total 74,970 new shares. The shares were registered with the Trade Register on 20 March 2008. Acquisition of own shares The Board of Directors of Talentum Oyj decided on 26 February 2008, by virtue of an authorization given by the Annual General Meeting on 27 March 2007, to acquire a maximum of 500,000 of the company's own shares, which corresponds to about 1.13% of all the company's shares. The shares will be acquired with the company's distributable funds, and the acquisition of the shares will reduce the company's distributable unrestricted equity. The shares will be acquired in public trading on the OMX Nordic Exchange Helsinki at the price on the day of purchase as provided by the law on the public trading of shares. The own shares will be acquired for use as consideration in possible corporate acquisitions and other arrangements when the company acquires assets relevant to its operations, and for developing the company's main structure, including the possible further conveying and cancellation of shares. There is therefore a significant financial reason for acquiring the shares. By 30 June 2008, the company had acquired the allowed 500,000 shares, and had in its possession a total of 681,000 of the company's own shares. Decreasing the share premium The Annual General Meeting decided that the share premium as shown in the balance sheet as at 31 December 2007 will be decreased by EUR 89,593,601.28. The decreased amount will be transferred to the invested unrestricted equity fund. After the decrease, the amount of the share premium in the balance sheet will be zero. The reduction of the share premium requires public notice to creditors and registration procedure in accordance with chapter 14 sections 3-5 of the Limited Liability Companies Act. Management share-based incentive plan The Group management of Talentum Oyj has a share-based incentive plan. The plan includes three earning periods, which last for at least one financial year and not more than three financial years. The first earning period began on 1 January 2007 and ended on 31 December 2007. 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 earning period. The proportion to be paid in cash will cover taxes and tax-related costs arising from the reward. Transferring the shares earned from the earning period 2007 within two years from the end of the earning 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 one year after the end of the service. The Board of Directors will later decide on the following earning periods and transfer restrictions concerning shares earned on the basis of those earning periods. The target group in the plan for the 2008 earning period comprises 10 people. Notifications The Ilmarinen Mutual Pension Insurance Company declared on 3 June 2008 that through a share transaction concluded on 2 June 2008 the percentage of votes and share capital in Talentum Oyj represented by the Talentum shares in its possession had exceeded one twentieth (1/20), at 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. Liquidity providing agreement An agreement with Nordea Securities Oyj on a liquidity providing for Talentum Oyj shares became effective on 21 June 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. TABLES CONSOLIDATED INCOME STATEMENT -------------------------------------------------------------------------------- | | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ | | | 2008 | 2007 | 2008 | 2007 | 2007 | -------------------------------------------------------------------------------- | EUR million | | | | | | -------------------------------------------------------------------------------- | CONTINUING OPERATIONS | | | | | | -------------------------------------------------------------------------------- | Net sales | 27.1 | 25.6 | 53.8 | 51.9 | 101.2 | -------------------------------------------------------------------------------- | Other operating income | 0.1 | 0.1 | 0.3 | 0.3 | 0.6 | -------------------------------------------------------------------------------- | Material and services | -4.4 | -4.4 | -8.8 | -8.6 | -16.3 | -------------------------------------------------------------------------------- | Employee benefit expenses | -12.6 | -12.3 | -24.6 | -24.0 | -45.1 | -------------------------------------------------------------------------------- | Depreciation and | -0.4 | -0.6 | -0.9 | -1.2 | -2.3 | | amortization | | | | | | -------------------------------------------------------------------------------- | Other operating expenses | -7.1 | -7.5 | -13.5 | -13.4 | -25.4 | -------------------------------------------------------------------------------- | Operating profit | 2.7 | 0.9 | 6.3 | 4.9 | 12.7 | -------------------------------------------------------------------------------- | Financial income | 0.2 | 0.2 | 0.2 | 0.4 | 0.7 | -------------------------------------------------------------------------------- | Financial expenses | -0.3 | -0.4 | -0.5 | -0.6 | -1.8 | -------------------------------------------------------------------------------- | Share of results of | 0.2 | 0.0 | -0.3 | -0.1 | -0.1 | | associates companies | | | | | | | | | | | | | -------------------------------------------------------------------------------- | Profit before taxes | 2.8 | 0.7 | 5.8 | 4.6 | 11.5 | -------------------------------------------------------------------------------- | Taxes | -0.8 | -0.3 | -1.8 | -1.4 | -3.1 | -------------------------------------------------------------------------------- | Profit for the period, | 2.0 | 0.4 | 4.0 | 3.3 | 8.4 | | continuing operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | DISCONTINUED OPERATIONS | | | | | | -------------------------------------------------------------------------------- | Profit for the period, | - | 0.3 | 0.4 | 0.4 | 0.8 | | discontinued operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 2.0 | 0.6 | 4.4 | 3.6 | 9.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | | -------------------------------------------------------------------------------- | Equity holders of the | 2.0 | 0.6 | 4.4 | 3.6 | 8.8 | | parent company | | | | | | -------------------------------------------------------------------------------- | Minority interest | 0.0 | 0.0 | 0.0 | 0.1 | 0.4 | -------------------------------------------------------------------------------- | Basic and diluted * | | | | | | -------------------------------------------------------------------------------- | Earnings per share, EUR | 0.04 | 0.01 | 0.10 | 0.08 | 0.20 | -------------------------------------------------------------------------------- | Earnings per share, | 0.04 | 0.01 | 0.09 | 0.08 | 0.19 | | continuing operations, EUR | | | | | | -------------------------------------------------------------------------------- *) Earnings per share are calculated on the profit attributed to the shareholders of the parent company. CONSOLIDATED BALANCE SHEET -------------------------------------------------------------------------------- | | 30.6.2008 | 30.6.2007 | 31.12.2007 | -------------------------------------------------------------------------------- | EUR million | | | | -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Property, plant and equipment | 2.0 | 7.0 | 6.6 | -------------------------------------------------------------------------------- | Goodwill | 25.9 | 26.9 | 32.5 | -------------------------------------------------------------------------------- | Other intangible assets | 12.2 | 12.2 | 11.8 | -------------------------------------------------------------------------------- | Investments in associates | 0.5 | 2.8 | 2.1 | -------------------------------------------------------------------------------- | Available-for-sale investments | 0.1 | 0.9 | 0.1 | -------------------------------------------------------------------------------- | Deferred tax assets | 0.8 | 3.6 | 1.0 | -------------------------------------------------------------------------------- | Receivables | 1.6 | 0.6 | 0.7 | -------------------------------------------------------------------------------- | Total non-current assets | 43.0 | 53.9 | 54.9 | -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 1.4 | 5.2 | 4.4 | -------------------------------------------------------------------------------- | Trade and other receivables | 9.4 | 13.0 | 15.8 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 9.0 | 22.6 | 13.8 | -------------------------------------------------------------------------------- | Total current assets | 19.8 | 40.8 | 34.1 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 62.8 | 94.8 | 89.0 | -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- | Equity attributable to | | | | | shareholders of the parent | | | | -------------------------------------------------------------------------------- | Share capital | 18.6 | 18.6 | 18.6 | -------------------------------------------------------------------------------- | Share premium reserve | 5.9 | 5.9 | 5.9 | -------------------------------------------------------------------------------- | Other reserves | -0.3 | 0.1 | -0.2 | -------------------------------------------------------------------------------- | Treasury shares | -2.8 | -1.3 | -1.3 | -------------------------------------------------------------------------------- | Retained earnings | 2.9 | 2.4 | 7.4 | -------------------------------------------------------------------------------- | Total | 24.3 | 25.7 | 30.3 | -------------------------------------------------------------------------------- | Minority interest | 0.1 | 1.6 | 1.6 | -------------------------------------------------------------------------------- | Total equity | 24.4 | 27.3 | 31.9 | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 3.1 | 3.2 | 3.1 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 2.3 | 3.3 | 3.8 | -------------------------------------------------------------------------------- | Pension obligations | - | 0.1 | 0.1 | -------------------------------------------------------------------------------- | Provisions | 0.9 | 1.7 | 1.4 | -------------------------------------------------------------------------------- | Total non-current liabilities | 6.3 | 8.3 | 8.3 | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 5.1 | 27.3 | 15.4 | -------------------------------------------------------------------------------- | Trade and other payables | 26.8 | 31.4 | 33.1 | -------------------------------------------------------------------------------- | Provisions | 0.2 | 0.3 | 0.3 | -------------------------------------------------------------------------------- | Total current liabilities | 32.1 | 59.1 | 48.8 | -------------------------------------------------------------------------------- | TOTAL EQUITY AND LIABILITIES | 62.8 | 94.8 | 89.0 | -------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENT -------------------------------------------------------------------------------- | EUR million | 1-6/ 2008 | 1-6/ 2007 | 1-12/ 2007 | -------------------------------------------------------------------------------- | Cash flows from operating activities, | | | | | continuing operations | | | | -------------------------------------------------------------------------------- | Operating profit | 6.3 | 4.9 | 12.7 | -------------------------------------------------------------------------------- | Adjustments to operating profit | -0.2 | 1.9 | 3.6 | -------------------------------------------------------------------------------- | Change in working capital | 0.1 | 3.1 | -2.2 | -------------------------------------------------------------------------------- | Financial items and taxes | -0.9 | -0.6 | -0.8 | -------------------------------------------------------------------------------- | Net cash from operating activities | 5.3 | 9.3 | 13.3 | -------------------------------------------------------------------------------- | Cash flows from investing activities, | | | | | continuing operations | | | | -------------------------------------------------------------------------------- | Acquisitions of subsidiaries and | | -3.2 | -6.4 | | associates, net of cash | | | | -------------------------------------------------------------------------------- | Disposal of subsidiaries and | 3.2 | 0.3 | 1.0 | | associates, net of cash | | | | -------------------------------------------------------------------------------- | Acquisition of property, plant and | -1.2 | -0.8 | -0.9 | | equipment and intangible assets | | | | -------------------------------------------------------------------------------- | Other items | 0.0 | -0.1 | 0.2 | -------------------------------------------------------------------------------- | Net cash from investing activities | 2.1 | -3.7 | -6.0 | -------------------------------------------------------------------------------- | Cash flow from financing activities, | | | | | continuing operations | | | | -------------------------------------------------------------------------------- | Change in current loans | -10.0 | 6.0 | -6.4 | -------------------------------------------------------------------------------- | Proceeds from non-current loans | 0.0 | - | 1.4 | -------------------------------------------------------------------------------- | Repayment of non-current loans | -0.9 | -0.9 | -1.1 | -------------------------------------------------------------------------------- | Dividends paid | -8.8 | -7.9 | -8.0 | -------------------------------------------------------------------------------- | Purchase of treasury shares | -1.5 | - | - | -------------------------------------------------------------------------------- | Other items | 0.0 | 0.0 | 0.1 | -------------------------------------------------------------------------------- | Net cash before financing activities | -21.3 | -2.8 | -14.1 | -------------------------------------------------------------------------------- | Discontinued operations | | | | -------------------------------------------------------------------------------- | Net cash from operating activities | 0.0 | 0.1 | 1.4 | -------------------------------------------------------------------------------- | Net cash from investing activities | 9.2 | -0.4 | -0.8 | -------------------------------------------------------------------------------- | Net cash before financing activities | 0.0 | -0.4 | -0.4 | -------------------------------------------------------------------------------- | Cash flow from discontinued operations | 9.2 | -0.6 | 0.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash and cash equivalents | -4.7 | 2.2 | -6.6 | -------------------------------------------------------------------------------- | Cash and cash equivalents at 31 | 13.8 | 20.4 | 20.4 | | December | | | | -------------------------------------------------------------------------------- | Foreign exchange adjustment | -0.1 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Net change in cash and cash | -4.7 | 2.2 | -6.6 | | equivalents | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at 30 June | 9.0 | 22.6 | 13.8 | -------------------------------------------------------------------------------- CHANGES IN EQUITY -------------------------------------------------------------------------------- | EUR | Share | Share | Other | Treas | Reta | Attrib | Minorit | Total | | million | capit | premi | reserv | ury | ined | utable | y | equity | | | al | um | es | share | earn | to the | interes | | | | | reser | | s | ings | share- | t | | | | | ve | | | | holder | | | | | | | | | | s of | | | | | | | | | | the | | | | | | | | | | parent | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 5.9 | -0.2 | -1.3 | 7.4 | 30.3 | 1.6 | 31.9 | | at 1 | | | | | | | | | | January | | | | | | | | | | 2008 | | | | | | | | | -------------------------------------------------------------------------------- | Change | | | -0.1 | | | -0.1 | | -0.1 | | 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 | | | | | 4.3 | 4.3 | | 4.3 | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | -0.1 | | 4.2 | 4.1 | -4.1 | 2.7 | | 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 | | | | | | | | | -------------------------------------------------------------------------------- | Sharebas | | | | | | | | | | ed | | | | | | | | | | payments | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 5.9 | -0.3 | -2.8 | 2.8 | 24.2 | 0.1 | 24.3 | | at 30 | | | | | | | | | | June | | | | | | | | | | 2008 | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 5.9 | 0.5 | -1.3 | 6.7 | 30.5 | 1.7 | 32.2 | | at 1 | | | | | | | | | | January | | | | | | | | | | 2007 | | | | | | | | | -------------------------------------------------------------------------------- | Change | | | -0.4 | | -0.1 | -0.5 | | -0.5 | | in | | | | | | | | | | translat | | | | | | | | | | ion | | | | | | | | | | differen | | | | | | | | | | ces | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | 0.1 | 0.1 | | items | | | | | | | | | -------------------------------------------------------------------------------- | Profit | | | | | 3.6 | 3.6 | 0.1 | 3.6 | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | -0.4 | | 3.5 | 3.1 | 0.2 | 3.2 | | recogniz | | | | | | | | | | ed | | | | | | | | | | income | | | | | | | | | | and | | | | | | | | | | expenses | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | -7.9 | -7.9 | -0.3 | -8.2 | | s paid | | | | | | | | | -------------------------------------------------------------------------------- | Share- | | | | | 0.1 | 0.1 | | 0.1 | | based | | | | | | | | | | payments | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18.6 | 5.9 | 0.1 | -1.3 | 2.4 | 25.7 | 1.6 | 27.3 | | at 30 | | | | | | | | | | June | | | | | | | | | | 2007 | | | | | | | | | -------------------------------------------------------------------------------- The change in the number of shares is detailed in the notes to the financial statements. NOTES TO THE FINANCIAL STATEMENTS This interim report has been drawn up according to the IAS 34 Interim Financial Reporting standard. In drawing up this interim report, Talentum has applied the same accounting principles as in the financial statements for 2007 apart from those described in the following paragraph. In drawing up the interim report, the Group has recognized as an asset the costs of developing the online business operations under intangible assets in progress. The costs of project research have been recognized as an expense in the income statement when they have materialized. Development expenditure has been recognized as an asset when the asset has been considered to be technically feasible and commercially exploitable, and it is expected to produce future financial benefit. The economic useful life of intangible assets created from development activities is two years. The main item in the development costs is outsourcing. As of 1 January 2008, Talentum has adopted the following new IFRIC interpretations: IFRIC 11 Group and Treasury Share Transactions and IFRIC 14, IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The adoption of the interpretations has had no effect on Talentum's interim report. Other new interpretations are not relevant to the Group. All the figures in this report have been rounded up or down, so the sum of the figures may be different from the totals shown. TALENTUM GROUP BY BUSINESS AREA, CONTINUING OPERATIONS -------------------------------------------------------------------------------- | EUR million | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ | 12 | 12 | | | 2008 | 2007 | 2008 | 2007 | 2007 | months | months | | | | | | | | rolling | rolling | | | | | | | | 7/07-6/ | 7/06-6/ | | | | | | | | 08 | 07 | -------------------------------------------------------------------------------- | Net sales | | | | | | | | -------------------------------------------------------------------------------- | Publishing | 24.4 | 20.6 | 47.5 | 41.5 | 83.8 | 89.8 | 78.9 | -------------------------------------------------------------------------------- | Direct | 2.6 | 2.4 | 5.2 | 4.8 | 9.5 | 9.9 | 8.8 | | marketing | | | | | | | | -------------------------------------------------------------------------------- | Premedia | 1.5 | 3.9 | 3.8 | 8.0 | 12.5 | 8.3 | 15.9 | -------------------------------------------------------------------------------- | Adjustments | -1.4 | -1.2 | -2.7 | -2.4 | -4.7 | -5.0 | -4.5 | | and | | | | | | | | | eliminations | | | | | | | | -------------------------------------------------------------------------------- | Total | 27.1 | 25.6 | 53.8 | 51.9 | 101.2 | 103.1 | 99.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating | | | | | | | | | profit | | | | | | | | -------------------------------------------------------------------------------- | Publishing | 3.1 | 2.9 | 6.7 | 6.8 | 14.8 | 14.7 | 10.4 | -------------------------------------------------------------------------------- | Direct | 0.2 | 0.3 | 0.6 | 0.7 | 1.3 | 1.3 | 1.2 | | marketing | | | | | | | | -------------------------------------------------------------------------------- | Premedia | 0.3 | -1.4 | 0.6 | -1.2 | -0.9 | 1.0 | -3.9 | -------------------------------------------------------------------------------- | Adjustments | -0.8 | -0.8 | -1.7 | -1.3 | -2.5 | -2.9 | -2.4 | | and | | | | | | | | | eliminations | | | | | | | | -------------------------------------------------------------------------------- | Total | 2.7 | 0.9 | 6.3 | 4.9 | 12.7 | 14.1 | 5.3 | -------------------------------------------------------------------------------- GROUP COMPANIES SOLD IN THE PERIOD UNDER REVIEW In February, the Group sold the Varesvuo Partners sub-group, which focused on TV content production, except for the Group's shares in Oy Filmiteollisuus Fine Ab and companies which it owns, which were sold in March. The Varesvuo Partners sub-group has not been included in Talentum's consolidated figures for January-March, except for Oy Filmiteollisuus Fine Ab's zero result. The Varesvuo Partners sub-group was classed overall as discontinued operations in January. The main areas of activity of the Varesvuo Partners companies are TV programme production and advertising film production. The customers are TV channels and advertising agencies. Talentum focuses on publishing targeted at professionals, and TV programme production and advertising films are no longer seen to have any synergy with the core operations. Financial performance of discontinued operations -------------------------------------------------------------------------------- | EUR million | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- | Revenue | 1.1 | 11.8 | 24.1 | -------------------------------------------------------------------------------- | Costs | -0.6 | -11.1 | -22.7 | -------------------------------------------------------------------------------- | Taxes | -0.0 | -0.3 | -0.6 | -------------------------------------------------------------------------------- | Profit after taxes | 0.4 | 0.4 | 0.8 | -------------------------------------------------------------------------------- | Earnings per share, | 0.01 | 0.01 | 0.01 | | discontinued operations | | | | -------------------------------------------------------------------------------- The revenue in the period January-June 2008 includes the profit of EUR 0.8 million on the sale of the Varesvuo Partners sub-group and the loss of EUR 0.4 million caused by the sale of Oy Filmiteollisuus Fine Ab, which was separated from the sub-group and sold separately in March. Effect of sale of discontinued operations on the Group's financial position -------------------------------------------------------------------------------- | EUR million | 30.6.2008 | -------------------------------------------------------------------------------- | Property, plant and equipment | 3.3 | -------------------------------------------------------------------------------- | Goodwill | 4.1 | -------------------------------------------------------------------------------- | Other intangible assets | 0.3 | -------------------------------------------------------------------------------- | Investments in associates | 1.6 | -------------------------------------------------------------------------------- | Inventories | 3.0 | -------------------------------------------------------------------------------- | Current receivables | 3.4 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 1.7 | -------------------------------------------------------------------------------- | Minority interest | -1.3 | -------------------------------------------------------------------------------- | Non-current liabilities | -0.3 | -------------------------------------------------------------------------------- | Current liabilities | -5.3 | -------------------------------------------------------------------------------- | Total assets and liabilities | 10.7 | -------------------------------------------------------------------------------- | Total consideration | 11.1 | -------------------------------------------------------------------------------- | Consideration received in cash | 11.1 | -------------------------------------------------------------------------------- | Cash disposed of | 1.7 | -------------------------------------------------------------------------------- | Net cash inflow | 9.2 | -------------------------------------------------------------------------------- Effect of sale of shareholding in DH Tools Oy, Sata-Flexo Oy and Marvaco Oy on the Group's financial position In February, the Group also sold its entire shareholding in DH Tools Oy, which was part of Premedia and focused on digital data management. DH Tools Oy's main area of activity is supplying companies with digital systems for marketing. At the time of sale, it was employing 16 people. In April, the Group sold its entire shareholding in Sata-Flexo Oy and Marvaco Oy, which belonged to the package printing material function of the Premedia business area. These companies employed about 40 people at the time. The sales were part of the Group withdrawal from operations unrelated to the core operations. The sales have not had a material effect on the Group's financial performance or its financial position. -------------------------------------------------------------------------------- | EUR million | 30.6.2008 | -------------------------------------------------------------------------------- | Property, plant and equipment | 0,7 | -------------------------------------------------------------------------------- | Goodwill | 2,5 | -------------------------------------------------------------------------------- | Other intangible assets | 0,1 | -------------------------------------------------------------------------------- | Inventories | 0,2 | -------------------------------------------------------------------------------- | Current receivables | 1,0 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 0,0 | -------------------------------------------------------------------------------- | Current liabilities | -1,5 | -------------------------------------------------------------------------------- | Total assets and liabilities | 3,1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consideration received in cash | 3,1 | -------------------------------------------------------------------------------- | Cash disposed of | 0,0 | -------------------------------------------------------------------------------- | Net cash inflow | 3,1 | -------------------------------------------------------------------------------- CHANGE IN NUMBER OF SHARES -------------------------------------------------------------------------------- | | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- | 1,000 | | | | -------------------------------------------------------------------------------- | Shares outstanding at | 44,040 | 44,040 | 44,040 | | beginning of period | | | | -------------------------------------------------------------------------------- | Share issue | 75 | - | - | -------------------------------------------------------------------------------- | Acquisition of own shares | -500 | - | - | -------------------------------------------------------------------------------- | Number of shares outstanding | 43,615 | 44,040 | 44,040 | | at end of period | | | | -------------------------------------------------------------------------------- The free-of-charge, directed share issue consists of the shares granted to the company's management on the basis of Talentum Oyj's share-based incentive plan. By virtue of the authorization granted, a total of 500,000 own shares were acquired for the company by 30 June 2008 for use as consideration in possible corporate acquisitions and other arrangements, including the possible cancellation of shares. At the end of the period under review, the Group had in its possession a total of 681,000 own shares. The weighted average of the number of shares that was used for calculating the earnings per share during the period under review is 43,957,217 (44,039,817 in January-June 2007 and January-December 2007). AVERAGE NUMBER OF STAFF, CONTINUING OPERATIONS -------------------------------------------------------------------------------- | | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Publishing | 425 | 370 | 384 | -------------------------------------------------------------------------------- | Direct marketing *) | 361 | 350 | 365 | -------------------------------------------------------------------------------- | Premedia | 61 | 160 | 133 | -------------------------------------------------------------------------------- | Group Administration | 15 | 12 | 14 | -------------------------------------------------------------------------------- CONTINGENT LIABILITIES AND OTHER COMMITMENTS -------------------------------------------------------------------------------- | EUR million | 30.6.2008 | 30.6.2007 | 31.12.2007 | -------------------------------------------------------------------------------- | Financial institution loans | 2.3 | 2.8 | 3.7 | -------------------------------------------------------------------------------- | Book value of shares pledged | 3.5 | 5.9 | 8.7 | -------------------------------------------------------------------------------- | Mortgaged real estates | 0.4 | 0.4 | 0.4 | -------------------------------------------------------------------------------- CHANGE IN PROPERTY, PLANT AND EQUIPMENT -------------------------------------------------------------------------------- | EUR million | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- | Carrying value at start of period | 6.6 | 7.9 | 7.9 | -------------------------------------------------------------------------------- | Additions | 0.3 | 0.8 | 1.5 | -------------------------------------------------------------------------------- | Disposals through disposals of | -4.3 | | -0.4 | | subsidiaries | | | | -------------------------------------------------------------------------------- | Disposals/transfers | 0.0 | -0.4 | 0.0 | -------------------------------------------------------------------------------- | Depreciation for the period | -0.6 | -1.3 | -2.5 | -------------------------------------------------------------------------------- | Carrying value at end of period | 2.0 | 7.0 | 6.6 | -------------------------------------------------------------------------------- RELATED PARTIES TRANSACTIONS -------------------------------------------------------------------------------- | EUR million | 30.6.2008 | 30.6.2007 | 31.12.2007 | -------------------------------------------------------------------------------- | Management employee benefits | 0.6 | 0.7 | 2.0 | -------------------------------------------------------------------------------- | Support payments to pension fund | 3.5 | 1.8 | 4.3 | -------------------------------------------------------------------------------- | Associates and joint ventures: | | | | -------------------------------------------------------------------------------- | Sales | 0.0 | 0.1 | 0.2 | -------------------------------------------------------------------------------- | Purchases | 0.0 | 0.3 | 0.5 | -------------------------------------------------------------------------------- | Current receivables | 0.0 | 0.0 | 0.1 | -------------------------------------------------------------------------------- | Current liabilities | 0.6 | 0.5 | 0.5 | -------------------------------------------------------------------------------- Calculation of key indicators Earnings per share, EUR = Profit for the period attributable to equity holders / Adjusted average number of shares at the end of the period Equity per share, EUR = Equity attributable to the equity shareholders / Adjusted average number of shares at the end of the period Equity ratio, % = Total equity / Balance sheet total - advances received x100 Gearing, % = Interest-bearing debts - cash and cash equivalents / Total equity x100 Market capitalization = Number of shares at the end of the period x Trading price at the end of the period The figures in this release are unaudited. The forecasts and estimates presented here are based on the management's view of developments in the economy at this present moment, and the actual results may differ substantially from what the company now expects. In 2008, Talentum will be publishing the interim report for January-September on 28 October. TALENTUM OYJ Juha Blomster CEO FURTHER INFORMATION Juha Blomster, CEO, tel +358 40 342 4444 Kaisa Kokkonen, CFO, tel +358 40 342 4212 www.talentum.fi COPIES TO OMX Nordic Exchange Helsinki Key media BRIEFING A briefing will be held for analysts and the media today, 23 July 2008 at 10.00 at the Talentum head office, Annankatu 34-36 B, Kamppi, Helsinki. The financial performance will be presented by CEO Juha Blomster and CFO Kaisa Kokkonen. Talentum Oyj Annankatu 34 - 36 B 00100 Helsinki Finland Tel + 358 20 442 40 www.talentum.com
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