Vaahto Group Plc Oyj - Financial Statement Release

VAAHTO GROUP'S PREVIEW OF RESULTS FOR FISCAL YEAR 1.9.2007-31.8.2008

VAAHTO GROUP PLC OYJ STOCK EXCHANGE BULLETIN 14.11.2008 at 10.00

VAAHTO GROUP'S PREVIEW OF RESULTS FOR FISCAL YEAR 1.9.2007-31.8.2008

Vaahto Group's turnover for the fiscal period was 73.2 MEUR (88.2
MEUR) and operating profit 0.6 MEUR (5.8 MEUR). Earnings per share
were 0.08 euros. The Board of Directors will propose a dividend of
0.10 euros per share.

Business developments

Vaahto Group's turnover for the fiscal year ending in August 2008 was
73.2 million euros (88.2 million euros), with an operating profit of
0.6 million euros (5.8 million euros). The Group's turnover decreased
by 17% from the previous fiscal year's figure. In addition to the
decreased turnover, the result was undermined by the poor
profitability of the Pulp & Paper Machinery division's project
deliveries completed during the period under review. Vaahto Group's
order backlog increased toward the end of the period, coming to 54.4
million euros (42.9 million euros) on August 31.

Pulp & Paper Machinery

The Pulp & Paper Machinery division's turnover for the fiscal year was
39.5 million euros (54.2 million euros), with an operating loss of 3.3
million euros (operating profit of 3.7 million euros). The division's
result was significantly lower than in the previous fiscal year and
became negative. Profits were hampered by the decreased turnover and
the poor profitability of project deliveries completed during the
period.

The division's roll sales and roll-servicing business saw moderate
results. The expansion of the product range has strengthened the
competitiveness of the division's roll-servicing business and supports
Pulp & Paper Machinery's full-system deliveries.

The market situation has remained challenging. The forest industry's
investment rate in Finland and the rest of Europe is low, and the
competitive situation in Asia has tightened considerably. Despite the
tough competition, the Pulp & Paper Machinery division's sales picked
up toward the end of the fiscal year. Significant orders included the
modernization of a paper machine for Kama in Russia and delivery of
the main equipment for a multi-layer board machine at the Jingxing
Pinghu plant in China.

The operations of the subsidiary company established in Shanghai in
the previous fiscal year have gotten off to a good start, which has
improved the division's competitive position in the Chinese market.

Vaahto Pulp & Paper Machinery's goal is to keep strengthening its
position as one of the leading suppliers of technology and services in
the demanding international paper and board machine markets.

Process Machinery

The Process Machinery division's turnover for the fiscal year was 34.4
million euros (34.1 million euros), with an operating profit of 4.0
million euros (2.0 million euros). Profitability improved for both
tanks and agitators.

The Process Machinery division's sales were good during the period
under review. The most significant orders for Japrotek Oy Ab, part of
the division, included an absorption tower for Uhde GmbH in Germany
and a leaching autoclave for Norilsk Nickel Harjavalta Oy. Stelzer
R”rtechnik International GmbH, a German company in the division,
achieved good sales for the fiscal year, and the company received
significant orders from, e.g., North America and China, in addition to
its strong local market area in Central Europe.

During the period under review, Vaahto Oy signed an agreement to sell
its spiral heat exchanger business, which belonged to the Process
Machinery division, to the German HES Heat Exchanger Systems GmbH. The
sale included the spiral heat exchanger production line and its
machinery and equipment, with related intangible rights. The
production machinery and equipment were transferred to the buyer in
spring 2008. The annual turnover for spiral heat exchanger business
has fluctuated between two and four million euros. Vaahto Oy
recognized a profit of 0.6 million euros for the sale in the fourth
quarter of the fiscal year.

Results

Vaahto Group's operating profit for the fiscal year was 0.6 million
euros, as compared to 5.8 million euros in the previous fiscal year.
The operating profit for the period equaled 0.9% (6.6%) of the Group's
turnover. Profits for the fiscal year totaled 0.3 million euros (3.9
million euros), and the Group saw a 2.6% (25.8%) return on investment.
The main reasons for the reduced profitability were the decreased
turnover and the poor profitability of the Pulp & Paper Machinery
project deliveries completed during the period.

Financing

The Group's cash flow was 1.2 million euros (-5.8 million euros). The
Group's net financial expenses came to 0.7 million euros (0.6 million
euros), or 1.0% (0.7%) of turnover. Investment cash flow in the fiscal
year was -4.0 million euros (-1.1 million euros). The increase in
debt, including interest, was 3.2 million euros.

Period-end total assets and liabilities on the consolidated balance
sheet stood at 41.8 million euros (52.2 million euros), and the parent
company's balance sheet showed 17.0 million euros (11.1 million
euros). The Group's equity ratio increased slightly, to 37.3% (35.5%).

Investments

The Group's investments in capital assets for the fiscal period
totaled 4.6 million euros (1.5 million euros). The most significant
investments were Vaahto Group's new enterprise resource planning
system, the polyurethane and composite equipment for Vaahto Roll
Service Oy (formerly AK-Tehdas Oy), and Japrotek Oy Ab's water
treatment equipment. Other investments consisted mainly of smallermachinery and equipment acquisitions and of investments in information
systems.

Information systems

The Group's information systems and information management were
developed further, in accordance with the centralized operations
model. The period saw the new Group-wide SAP enterprise resource
planning system implemented successfully.

Research and development

The Group's research and development activities focused for the most
part on improving the competitiveness of roll servicing and of the
Pulp & Paper Machinery division's key components for paper and board
machines. The scope of the Group's R&D activities remained the same as
in the previous fiscal period.

Personnel

Group personnel averaged 426 (414) over the fiscal year and numbered
424 (428) at the end of the period.

Risks and business uncertainties

Demand for Vaahto Group products depends largely on economic cycles
and developments in the world economy and the customer industries.
Risk caused by fluctuations in demand is being compensated for through
adjustment of the Group's sales operations in line with the economic
cycles of various markets and customer industries.

Large-scale projects involve the risk of the final result falling
short of expectations, since the project's future costs and other
risks that could affect the delivery cannot be assessed explicitly
enough at the tender stage. Risks associated with large projects can
be managed by applying various quality management systems,
profitability analyses, directives, and acceptance procedures.

The Group's financial risk management objectives are to minimize
harmful effects on the Group's result caused by fluctuations in
financial markets and to ensure that the Group can gain equity and
liability financing on competitive terms.

Business-related risks of material, consequential, and liability
losses are covered by appropriate insurance policies.

Shareholders' equity

The Board of Directors has no authority to issue new shares,
convertible bonds, or bonds with warrants, nor the authorization to
obtain or surrender shares.

Administration

The Annual General Meeting of December 14, 2007, elected the following
to the Board of Vaahto Group Plc Oyj:

Seppo Jaatinen, chairman
Mikko Vaahto, vice-chairman
Martti Unkuri, member
Antti Vaahto, member

Antti Vaahto served as CEO throughout the fiscal period.

The Group companies have been audited by the certified public auditing
firm Ernst & Young Oy, with Pauli Hirviniemi, CPA, as chief auditor.

Forecast of developments

Vaahto Group's competitiveness has improved, thanks to determined
product development and the expanded product range. However, the
market situation for the Group's major products is highly challenging.
In Europe and North America, the forest industry is having trouble and
investing very carefully. In the largest growing market area, China,
local suppliers are growing stronger and competition is growing
tighter. In addition, the international financial crisis has caused
insecurity in the market and postponement of investment decisions.

In spite of the challenging market situation, the Group's order book
as of 31 August is higher than a year earlier, laying a foundation for
business growth.

Proposal for distribution of profits

Parent company funds available for distribution of profits total
3,555,313.93 euros, of which 176,360.06 euros represents loss for the
fiscal period.

The Board will propose to the Annual General Meeting that a dividend
of 0.10 euros per share, for a total of 287,230.20 euros, be paid. The
remaining operating profit is to be transferred to the earnings
account.

The Annual General Meeting

The Annual General Meeting of Vaahto Group Plc Oyj will be held on
December 15, 2008 at 1.00 p.m. in the Sibelius Hall, Lahti.

Interim management statement

Instead of the interim report for the first three months of the
accounting period, Vaahto Group Plc Oyj will disclose the interim
management statement on January 16, 2009.
VAAHTO GROUP CONSOLIDATED FIGURES    
CONSOLIDATED           2007/08    % of  2006/07    % of
INCOME                      12   turn-       12   turn-
STATEMENT,IFRS          months    over   months    over
1000 EUR                                               
NET TURNOVER            73 207           88 161        
Change in finished                                     
goods and work                                         
in progress                 92              696        
Production                                             
for own use                693              377        
Other operating                                        
income                     688              303        
Material and                                           
services               -39 404          -50 629        
Employee benefits                                      
expenses               -21 082          -20 241        
Depreciations           -2 220           -1 840        
Other operating                                        
expenses               -11 339          -11 015        
OPERATING PROFIT           635     6,6    5 812     3,8
Financing income                                       
and expenses              -726             -611        
Share of results of                                    
affiliated companies        14               24        
PROFIT BEFORE TAXES        -77     5,9    5 226     2,3
Tax on income                                          
from operations           -396           -1 313        
PROFIT FOR THE             320     4,4    3 913     1,6
PERIOD
Net profit attributable: 
To equity holders                                      
of the parent              238            3 639        
To minority                                            
interest                    82              274        
Total                      320            3 913        
 Earnings per share calculated on profit attributable
 to equity holders of the parent:                        
 EPS undiluted,                                          
 euros/share               0,08              1,27        
 EPS diluted,                                            
 euros/share               0,08              1,27        
 Average number of                                       
 shares (1000                                            
 shares):
 undiluted                2 872             2 872        
 diluted                  2 872             2 872        
 CONSOLIDATED           31.8.08           31.8.07        
 BALANCE SHEET,IFRS                                      
 1000 EUR                                                
 ASSETS                                                  
 NON-CURRENT ASSETS:                                     
 Intangible assets        3 127               621        
 Goodwill                 1 702             1 702        
 Tangible assets         14 198            14 644        
 Shares in affiliated                                    
 companies                   39                24        
 Non-current trade                                       
 and
 other receivables           13                13        
 Other long-term                                         
 investments                 44                44        
 Deferred tax asset         471               120        
 NON-CURRENT ASSETS      19 594            17 169        
 CURRENT ASSETS:                                         
 Inventories              8 508             8 188        
 Trade receivables                                       
 and other               12 392            25 276        
 receivables
 Tax receivable,                                         
 income tax                 624                23        
 Cash equivalents             0               960        
 Cash and bank              730               574        
 CURRENT ASSETS          22 253            35 021        
 TOTAL ASSETS            41 847            52 190        
 CONSOLIDATED           31.8.08           31.8.07        
 BALANCE SHEET, IFRS                                     
 1000 EUR                                                
 EQUITY AND LIABILITIES                                  
 SHAREHOLDERS' EQUITY:                                   
 Share capital            2 872             2 872        
 Share premium                                           
 account                      6                 6        
 Other reserves           2 006             2 128        
 Retained earnings        7 537             8 436        
 Equity attributable                                     
 to equity holders                                       
 of the parent           12 421            13 442        
 Minority share           1 336             1 393        
 SHAREHOLDERS'                                           
 EQUITY                  13 757            14 835        
 NON-CURRENT                                             
 LIABILITIES:
 Deferred                                                
 tax liability              736               928        
 Long-term                                               
 liabilities,                                            
 interest-bearing         7 378             4 923        
 Non-current                                             
 provisions                 271               684        
 NON-CURRENT                                             
 LIABILITIES              8 385             6 536        
 CURRENT LIABILITIES:                                    
 Short-term                                              
 liabilities,                                            
 interest-bearing         7 087             6 331        
 Trade payables and                                      
 other liabilities       12 618            23 558        
 Tax liability,                                          
 income tax                   1               931        
 CURRENT LIABILITIES     19 705            30 819        
 TOTAL EQUITY AND                                        
 LIABILITIES             41 847            52 190        
 KEY FIGURES, IFRS      2007/08           2006/07        
 Shareholders'                                           
 equity per share,         4,32              4,68        
 euros
 Earnings per                                            
 share, euros              0,08              1,27        
 Solidity, %               37,3              35,5        
 Gross                                                   
 investments, 1000        4 613             1 502        
 EUR
 Total average                                           
 number of                                               
 personnel                  426               414        
 Order backlog at                                        
 the end of the                                          
 fiscal period, 1000     41 847            42 894        
 EUR
 The amount of contract revenue recognized as            
 revenue has been deducted from the order backlog.                   
 OTHER LIABILITIES      31.8.08           31.8.07        
 1000 EUR                                                
 Bank guarantees:                                
 Bank guarantee                                          
 limits
 total                   33 700            26 700        
 Bank guarantee                                          
 limits
 used                    16 523            21 692        
 Lease liabilities,                                      
 excluded financial                                      
 lease liabilities:                                      
 Current lease                                           
 liabilities                208               114        
 Lease liabilities                                       
 maturing                                                
 in 1-5 years               242               272        
 Total                      450               386        
 Other liabilities:                                      
 Granted guarantees          38               452        
 Derivative                                              
 contracts:
 Currency forward agreements are as a rule used          
 to hedge against exchange rate risks. The currency forward
 agreements have been used to protect receivables and               
 future assets. Interest rate agreements are used to hedge              
 against the changes of the interests.
 The derivative agreements of the group are booked
 according to IAS 39: Financial instruments. Derivative agreements
 are initially recognized at their purchase cost             
 which is equivalent to the fair value and they are               
 subsequently remeasured at fair value.                               
 Fair values            Nominal    Fair      Fair    Fair
 of derivative            value  value,    value,   value
 agreements                        pos.      neg.   total
 31.8.2008                                               
 1000 EUR                                                
 Interest rate swap                                      
 agreements              15 924      14      -140    -126
 Fair values of derivative agreements are determined by
 using the market prices for the equivalent agreements on the
 day of the closing of  the accounts. Fair values state for the
 income or expenses the group would book if the derivative
 agreements were closed at the end of the fiscal period.            
 CONSOLIDATED FLOW      2007/08           2006/07        
 OF FUNDS                    12                12        
 STATEMENT, IFRS         months            months        
 1000 EUR                                                
 Flow of funds                                           
 from operations:                                        
 Profit before taxes        -77             5 226        
 Adjustments              1 817             2 697        
 Change in working                                       
 capital                    336           -11 797        
 Financial income and                                    
 expenses and taxes        -840            -1 918        
 Flow of funds from                                      
 operations               1 236            -5 792        
 Flow of funds from                                           
investments:                                              
 Investments in                                          
 tangible and                                            
 intangible assets       -4 613            -1 502        
 Income from sales                                  
 of tangible and                                         
 intangible assets          650               405        
 Granted loans                0               -11        
 Flow of funds from                                      
 investments             -3 963            -1 108        
 Flow of funds from                                      
 financial items:                                        
 Withdrawals of                                          
 short-term loans         5 688             4 297        
 Payments of                                             
 short-term loans        -5 840            -1 792        
 Withdrawals of                                          
 long-term loans          4 878             2 247        
 Payments of                                             
 long-term loans         -1 515            -1 637        
 Dividends               -1 287              -671        
 Flow of funds from                                      
 financial items          1 923             2 444        
 Change of liquid                                        
 funds                     -804            -4 457        
 Lahti November 14, 2008
 VAAHTO GROUP PLC OYJ
 Antti Vaahto
 President (CEO)
 Information:
 Antti Vaahto
 CEO, Vaahto Group Plc Oyj
 tel. +358 40 8232835