Beltton-Group Plc Interim Report 1 January – 30 September 2006

Beltton-Group Plc STOCK EXCHANGE RELEASE 8 November 2006, at 9:00 a.m. BELTTON-GROUP PLC INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2006 Beltton-Group’s net sales increased slightly, while operating profit saw significant growth. The Group’s net sales increased by 0.4%, totalling EUR 43.2 million (EUR 43.0 million). Operating profit was up 72.5% to EUR 1.39 million (EUR 0.80 million). Profit for the period grew by 133.5% over the corresponding period in 2005, amounting to EUR 0.64 million (EUR 0.27 million), and earnings per share (EPS) were up to EUR 0.10 (EUR 0.04). NET SALES AND PROFIT DEVELOPMENT Beltton’s net sales in the review period were slightly higher than those in the comparison period. The Group’s net sales in January–September 2006 totalled EUR 43.2 million (EUR 43.0 million). Operating profit was EUR 1.39 million (EUR 0.80 million), representing 3.2% (1.9%) of net sales. Net profit for the period increased by 133.5%, totalling EUR 0.64 million (EUR 0.27 million), and earnings per share (EPS) were up to EUR 0.10 (EUR 0.04). Beltton-Group’s net sales and profit improved from the previous year. Says CEO Heikki Vienola: “Led by skilled and strong management Wulff has succeeded in enhancing profitability and acquiring new customers. Cost-effectiveness has been emphasised throughout the Group in the review period. Apart from improved cost-effectiveness, the Group’s results have also benefited from the additional sales generated by new employees. The third quarter has traditionally been the most challenging one in terms of operating profit due to summer vacations and because most of the business gift sales take place in the second and fourth quarters. I believe we are well positioned to continue to improve our results in the last quarter. Positive business development continued at Wulff Oy Ab, which accounts for some 45 per cent of Beltton-Group’s net sales. Cost savings measures and a broader customer base have had the expected impact. Wulff sells office supplies and computer accessories to major corporations and to the Finnish Government in line with its contract customer concept. The company has sold more than 1,000 MiniBar shelving systems to various Finnish companies. KB-tuote Oy and its Estonian subsidiary KB Eesti Oü saw good development in the review period. Especially KB-tuote Oy’s successful acquisition of contract customers in the early part of 2006 bore fruit in the third quarter. KB-tuote offers large and medium-sized companies an outsourced business gift service through which the customer can order products designed in line with the company brand. Beltton’s direct sales business consists of eight direct sales companies in Finland, all of which sell computer accessories, office supplies, corporate promotional products and ergonomic products. Beltton expects that the emphasis on recruitment and closer cooperation with recruitment company Vendiili will have a positive impact on net sales in the latter part of the year. Business has developed well in Beltton’s Scandinavian subsidiaries, especially in Norway. Telesales have produced particularly good results. On 5 April 2006, Beltton acquired a majority shareholding in Nordisk Profil A/S. FINANCING AND INVESTMENTS Operating cash flow amounted to EUR 1.45 million (EUR 0.96 million) in the review period. The consolidated balance sheet total at the end of the period amounted to EUR 38.5 million (EUR 37.3 million) and the equity ratio was 45.1% (45.3%). The Group’s liquid assets amounted to EUR 4.4 million (EUR 2.4 million). Investments in fixed assets entered in the balance sheet amounted to EUR 0.79 million (EUR 0.56 million), or 1.8% (1.3%) of net sales, and mainly involved machinery and equipment. PERSONNEL Beltton-Group Plc had 439 (460) employees at the end of the review period and an average of 437 (472) employees over the period. A total of 88 (96) employees work in Sweden, Norway and Estonia. ACQUISITION On 29 September 2006 Beltton-Group Plc’s subsidiary, KB-tuote Oy, acquired a majority shareholding in IM Inter-Medson Oy, which sells and markets business and promotional gifts. In the financial period ended 30 June 2006 the company’s net sales were EUR 0.9 million and profit amounted to EUR 0.05 million. The integration of IM Inter-Medson Oy has proceeded well. The deal will further boost Beltton-Group’s market position in corporate promotional products. EVENTS AFTER THE REVIEW PERIOD Wulff Oy Ab and Logia Oy have signed a cooperation agreement concerning the logistics of office and computer supplies sold by Wulff. The agreement enables growth in line with Beltton’s strategy and contributes to the competitiveness of Wulff. Beltton believes that Wulff’s new logistics concept will strengthen both Wulff’s and the Group’s market position in office supplies. The agreement will transfer Wulff’s logistics operations and 21 warehouse employees from Wulff’s premises to Post’s logistics centre in early 2007. The employees transferred to the service of Post Logistics at the beginning of November under existing terms of employment. OUTLOOK FOR THE REST OF 2006 Owing to the cyclical nature of demand for business and promotional gifts, a significant share of the Group’s net sales and profit is generated in the second and fourth quarters. Company management believes that a strong customer base, new customers and successful recruitment will have a positive impact on business. Management expects the net sales and profit for all of 2006 to improve over the previous year. The Group is also prepared to pursue its growth strategy through acquisitions. Beltton-Group PLC (1000 euro) CONSOLIDATED INCOME STATEMENT 7-9/06 7-9/05 1-9/06 1-9/05 1-12/05 TURNOVER 13 329 12 763 43 181 43 014 60 101 Other operating income 47 53 205 153 271 Materials and services 7 252 7 214 23 001 22 337 31 807 Personnel expenses 2 955 3 234 10 680 11 207 15 016 Depreciation 299 311 888 914 1 219 Other operating expenses 2 202 2 129 7 430 7 905 10 606 OPERATING PROFIT 668 -71 1 387 804 1 724 Financial items -80 94 -225 -134 -171 PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES 588 23 1 162 670 1 554 Extraordinary items 0 0 0 0 0 PROFIT BEFORE TAXES 588 23 1 162 670 1 554 Income taxes 261 79 522 320 287 Minority interest 15 58 3 77 142 NET PROFIT 312 -114 637 273 1 126 CONSOLIDATED BALANCE SHEET (1000 euro) Assets 9/2006 9/2005 12/2005 FIXED ASSETS Intangible assets 426 326 332 Consolidation goodwill 4 697 4 542 4 542 Tangible assets 4 984 5 402 5 127 Investments held for sale 260 255 265 Investments 144 149 149 TOTAL FIXED ASSETS 10 510 10 674 10 416 CURRENT ASSETS Inventories 10 378 10 440 10 507 Sales receivables 8 358 8 151 7 255 Other receivables 3 836 4 159 4 142 Deferred tax assets 1 012 1 448 1 330 4 356 2 426 4 471 TOTAL CURRENT ASSETS 27 940 26 624 27 705 TOTAL ASSETS 38 450 37 298 38 121 Equity and liabilities 9/2006 9/2005 12/2005 EQUITY Share capital 2 603 2 603 2 603 Share issue 0 0 0 Share premium fund 7 662 7 662 7 662 Retained earnings 5 737 5 386 5 386 Net profit 637 273 1 126 TOTAL EQUITY 16 638 15 925 16 777 Minority interest 717 956 1 021 LIABILITIES Long-term liabilities 7 188 8 673 8 173 Short-term liabilities 13 906 11 744 12 151 TOTAL LIABILITIES 21 094 20 417 20 324 TOTAL EQUITY AND LIABILITIES 38 450 37 298 38 121 KEY RATIOS (1000 euro) 7-9/06 7-9/05 1-9/06 1-9/05 1-12/05 Turnover 13 329 12 763 43 181 43 014 60 101 Increase in turnover % 4,4 % 1,6 % 0,4 % -0,3 % -0,5 % Operating profit 668 -71 1 387 804 1 723 % of turnover 5,0 % -0,6 % 3,2 % 1,9 % 2,9 % Profit before tax 588 23 1 162 670 1 554 % of turnover 4,4 % 0,2 % 2,7 % 1,6 % 2,6 % Katsauskauden tulos 312 -114 637 273 1 126 % liikevaihdosta 2,3 % -0,9 % 1,5 % 0,6 % 1,9 % Equity ratio % 45,1 % 45,3 % 46,7 % Investments in fixed assets 365 206 790 562 957 % of turnover 2,7 % 1,6 % 1,8 % 1,3 % 1,6 % Average number of employees 437 472 460 Number of employees at end of period 439 460 434 Earnings per share 0,05 -0,02 0,10 0,04 0,17 Equity per share 2,56 2,45 2,58 CONSOLIDATED CASH FLOW (1000 euro) 1-9/06 1-9/05 1-12/05 Cash flow from operations: Payments received from sales 42 384 42 293 59 526 Payments received from other operating income 180 153 251 Amounts paid for operating expenses -40 873 -41 237 -57 767 Cash flow from business operations before financial items and taxes 1 690 1 208 2 011 Financial costs paid -235 -258 -325 Interests received from operations 46 29 79 Direct taxes paid -51 -23 -49 Cash flow from operations 1 450 956 1 716 Cash flow from investment activities: Investments in tangible and intangible assets -768 -562 -957 Sales of tangible and intangible assets 158 0 56 Acquisition of shares in subsidiaries -30 0 0 Sales of shares in subsidiaries 0 0 0 Sale of other investments 0 0 518 Cash flow from investment activities -640 -562 -383 Cash flow from financing activities: Share issue 0 0 0 Paid dividends -769 -1 041 -1 041 Received dividends 191 65 57 Short-term investments 221 621 0 Loss from the sale of short-term investments -116 -99 0 Loan withdrawals 45 0 1 715 Loan repayments -504 -168 -336 Cash flow from financing activities -932 -622 395 Change in liquid assets -122 -228 1 728 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Jan 1st – Sep 30th 2006 (1000 euro) Retain- Minor- Share ed ity Share premium earn- inte- capital fund ings Total rest Total Equity Jan 1st 2006 2 603 7 662 6 512 16 777 1 021 17 798 Net profit 637 3 640 Dividends paid -651 -118 -769 Investments available for sale: Valuation gains or losses recognised under shareholder’s equity -7 -7 Financial instruments recognised under shareholder’s equity -112 -112 Translation differences -6 -6 Changes in minority interest -189 -189 Equity Sep 30th 2006 2 603 7 662 6 373 16 638 717 17 335 BELTTON-GROUP PLC Further information: Heikki Vienola, CEO tel. +358 9 525 9000 or +358 50 65 110 e-mail: heikki.vienola@beltton.fi Sirpa Väisänen, IR Officer tel. +358 9 5259 0050 or +358 400 943 243 e-mail: sirpa.vaisanen@beltton.fi DISTRIBUTION The Helsinki Stock Exchange www.beltton.fi Key media