WULFF-GROUP PLC INTERIM REPORT 1 JANUARY – 31 MARCH 2008

WULFF-GROUP PLC INTERIM REPORT 8 MAY 2008, AT 9.00 A.M. WULFF-GROUP PLC INTERIM REPORT 1 JANUARY – 31 MARCH 2008 Wulff-Group’s net sales continued to grow and amounted to EUR 19.1 million (EUR 16.9 million). Operating profit totalled EUR 0.38 million (EUR 0.17 million). Result for the period showed a loss of EUR 0.19 million (EUR -0.07 million). Earnings per share (EPS) fell to EUR -0.03 (EUR – 0.01). NET SALES AND PROFIT DEVELOPMENT Wulff-Group Plc’s net sales increased by 13.1% year-on-year, totalling EUR 19.1 million (EUR 16.9 million). The increase in net sales was influenced by the acquisition of Entre Marketing in May, 2007. Wulff-Group’s operating profit was EUR 0.38 million (EUR 0.17 million), representing 2.0% (1.0%) of net sales. Profit before extraordinary items amounted to EUR 0.05 million (EUR 0.12 million). Earnings per share (EPS) dropped to EUR -0.03 from EUR -0.01 a year earlier. The Group made a loss of EUR 0.19 million after financial expenses in the first quarter (EUR -0.07 million). Compared with Q1 in 2007, the company’s sales grew. CEO Heikki Vienola: ”In addition to the Entre Marketing acquisition, the growth can be attributed to the sales of Wulff Oy Ab that remained good. During the spring we introduced the uniform name and brand, as Beltton-Group Plc became Wulff-Group Plc. Leading the way, quality and first-class service have always been the cornerstones in the business of Beltton and Wulff alike. Therefore Wulff, a recognized and valued company in the industry, was a natural choice as the umbrella brand for the entire group. The name change was a strong investment in our brand and its development, and I believe that it will help customers find us even better. Factors influencing this quarter’s results include the result of Entre Marketing that was weaker than expected and the seasonal character of business gift sales. Traditionally, most of the business gift sales take place in the second and, especially, the fourth quarter.” Wulff Oy Ab, a company that sells office supplies and computer accessories and accounts for about 40% of Wulff-Group’s net sales, managed to win new contract customers during the period. Both Wulff’s sales and profitability showed positive development during the review period. Wulff’s logistics renewal completed last year and the co-operation with Itella are reflected in the continuous service level increase. In 2008, Wulff will place a strong focus on new customer acquisition and expanding its customer base, which is now possible thanks to the new logistics solution. In the field of selling and marketing business and advertising gifts, KB-tuote Oy continued to expand its contractual customer base according to its goals. Improving profitability has been a focus area in the first quarter of this year, and the efforts will continue throughout the year, including such measures as optimizing the product range. KB-Tuote Oy provides major corporations with an outsourced business gift service whereby the customer can order products designed in line with the company brand through an electronic order system. In direct sales, the focus has been on sales supervisor training and improving the efficiency of the recruitment process and induction training. The review period’s sales were at the same level as last year. Investments were made during the period in a uniform sales control system for the Group’s direct sales companies, which brings cost savings and enables more efficient warehouse operations. Wulff-Group’s direct sales business consists of ten direct sales companies in Finland, all of which sell computer accessories, office supplies, corporate promotional products and ergonomic products. The Scandinavian subsidiaries of the Wulff-Group showed positive development, particularly in Norway. The investments made by the Norwegian subsidiary in business expansion and profitability were reflected in the growth of sales and results. The Swedish business results have remained at a good level. The latest corporate acquisition made by the Wulff-Group, Entre Marketing Oy that has been included in the incorporated financial statements as of May 9, 2007, focused on sales activation and commercialization during the review period. Expenses have come down thanks to more efficient cost monitoring but the business was, nevertheless, in the red during the first quarter. The efficiency improvements should result in better cost-efficiency during the following quarters. FINANCING AND INVESTMENTS Cash flow from business operations amounted to EUR 0.41 million (EUR 0.71 million). The consolidated balance sheet total at the end of the period amounted to EUR 40.5 million (EUR 40.4 million) and the equity ratio was 50.4 % (45.1 %). The investments in fixed assets entered in the balance sheet amounted to EUR 0.19 million, or 1.0% (EUR 0.30 million, 1.8%) of net sales. PERSONNEL Wulff-Group Plc had 455 (422) employees at the end of the review period and an average of 461 (417) employees over the period. A total of 92 (96) employees worked in Sweden, Norway and Estonia. CHANGE OF THE BUSINESS NAME The Board of Directors of Wulff-Group Plc decided on 11 March 2008 to propose to the Annual General Meeting that the business name be changed to Wulff-Group Plc. The new name strengthens the company’s renown as a trustworthy forerunner of good quality and as the market leader within the office business. In the future, the Wulff brand will be clearly visible in all marketing operations of the Group. The change of name does not change the operations of the subsidiaries. The names and businesses of the subsidiaries of the group and Wulff Oy Ab remain the same. The Annual General Meeting of Wulff-Group Plc decided on the change of business name on 4 April 2008. The change was entered into the Trade Register on 21 April 2008. Following the corporate name change, the trading code of the company’s share on the OMX Nordic Exchange in Helsinki was renamed to WUF1V. The change took effect in the trade system on 22 April 2008. EVENTS IN THE REVIEW PERIOD Jani Puroranta, MSc (Econ.) and MBA, was appointed Chief Business Development Officer of the Wulff-Group and member of Group Management as of 2 January 2008. Puroranta will be responsible for acquisitions and the development of strategy jointly with the Group’s management. Born in 1974, Puroranta transfers to Wulff-Group from McKinsey & Company, a global consulting firm. From 2002 to 2004 he worked at OMX Exchanges as Senior Vice President, Business Development & Support, and as a member of the management team, among other things. In addition, Puroranta has worked as a partner at Privanet Capital and in various management positions in the Helsinki Stock Exchange. The Group’s Board of Directors of Beltton-Group Plc decided on 6 February 2008 on a new share-based incentive plan for the Wulff-Group key personnel. The Plan includes three earning periods which are calendar years 2008, 2009 and 2010. The potential reward from the Plan for the earning period 2008 will be based on achieved results. The potential reward from the earning period 2008 will be paid as the Company’s shares and in cash in 2009. The proportion to be paid in cash will cover taxes and tax-related costs arising from the reward. The rewards to be paid on the basis of the Plan correspond approximately to the value of a maximum total of 70,000 Beltton-Group Plc shares. It is prohibited to transfer the shares during the two year restriction period. If a key person’s employment or service ends during the restriction period, he/she must return the shares given as reward to the Company without compensation. TREASURY SHARES The Board of Directors of Wulff-Group Plc decided in its meeting on 6 February 2008 to initiate a share buyback in accordance with the authorisation given to it at the Annual General Meeting on 4 April 2007. Treasury share acquisition was initiated on 14 February 2008. The shares were purchased through public trading at OMX Nordic Exchange Helsinki in a proportion other than that of current shareholder holdings at the market price determined in public trading at the time of purchase. The Group’s registered share capital on 31 March 2008 amounted to EUR 2,603,051.20 and the total amount of shares is 6,507,628. Wulff Group held 14,990 of its own shares on 31 March 2008, which represents 0.2% of the Group’s shares. With the said authorization, a total of 15,890 shares were acquired before the next Annual General Meeting which took place on 4 April 2008. The acquired shares represent 0.2% of the share capital of the Wulff-Group. DECISIONS MADE BY THE ANNUAL GENERAL MEETING Wulff-Group Plc’s Annual General Meeting held on 4 April 2008 unanimously adopted the financial statements for 2007 and discharged the members of the Board and the CEO from liability for the financial year. In accordance with the proposal of the Board of Directors the Annual General Meeting decided to pay a dividend of EUR 0.18 per share for the financial year 2007. The record date for the dividend payment was 9 April 2008, and the payment was made on 16 April 2008. The Annual General Meeting confirmed the Board of Directors’ proposals for amendments to the Articles of Association. The following amendments were resolved: – Change of the business name to Wulff-Group Plc and the domicile to Helsinki (Section 1). – Further specification of the company’s business sector (Section 2). – Deletion of the following Sections, rendered obsolete by the amendments to the Companies Act: Section 3 (minimum and maximum share capital), Section 4 (nominal value) and Section 12 (financial period). – Abbreviation of Section 5 by removal of the now obsolete transitional regulations for incorporation into the book-entry system. – Revision of the convocation period to the minimum 17 days stipulated in the Act, and deletion of the now obsolete reference to the book-entry system (Section 11). – Linking of the date and time of the Annual General Meeting to the end of the financial period (Section 13). The amendments to the Articles of Association were entered in Trade Register on 21 April 2008. The Annual General Meeting adopted the Board’s proposals concerning the authorisation to perform share issues and to buy the company’s own shares. The number of members of the Board was confirmed at six. The following members were re-elected: Ari Lahti, Ere Kariola, Ari Pikkarainen, Pentti Rantanen, Sakari Ropponen and Heikki Vienola. In its organising meeting held on 22 April 2008, the Board of Directors elected Ari Lahti as its Chairman. RISKS AND UNCERTAINTIES IN THE NEAR FUTURE Wulff-Group’s business experiences seasonal change, and a significant share of the company’s turnover and profit is generated in the fourth quarter. The main uncertainty factors in the near future are related to the profit development of Entre Marketing. The demand for corporate promotional products may begin to change, as the general economic sentiment takes a downward turn. No other significant changes have affected Wulff-Group’s risks and uncertainty factors. EVENTS AFTER THE REVIEW PERIOD The Board of Directors of Wulff-Group Plc decided in its meeting on 22 April 2008 to initiate a share buyback of maximum of 300,000 own shares in accordance with the authorisation given to it at the Annual General Meeting on 4 April 2008. The shares will be purchased through public trading at OMX Nordic Exchange Helsinki in a proportion other than that of current shareholder holdings. The shares will be purchased at the market price determined in public trading at the time of purchase. According to the authorisation, the treasury shares can be acquired to carry out acquisitions or other business-related arrangements, to improve the company’s capital structure, to support the implementation of the company’s incentive scheme or to be cancelled or disposed of. The acquisition of the company’s own shares shall start at the earliest on 9 May 2008 and end by the end of the next Annual General Meeting at the latest. OUTLOOK FOR 2008 Wulff-Group expects the office supplies market to continue to grow moderately in 2008. Wulff-Group’s outlook for 2008 is favourable. Company management believes that the Group’s turnover and operating profit will improve year-over-year. Wulff-Group is prepared for acquisitions in line with its strategy. ACCOUNTING PRINCIPLES APPLIED IN THE INTERIM REPORT This interim report was prepared in compliance with the IFRS accounting and valuation principles and the principles of IAS 34. The accounting principles are the same as those used in the financial statements for 2007. This interim report has not been audited. FINANCIAL REPORTING Wulff-Group Plc will publish financial reports in 2008 as follows: – Interim Report 1.1. – 30.6.2008 on Friday, 8 August 2008 – Interim Report 1.1. – 30.9.2008 on Thursday 6 November 2008. INVESTOR AND ANALYST MEETING Wulff-Group Plc will arrange a meeting with investors and analysts in the company’s premises in the Autotalo building in Helsinki, at Salomonkatu 17 B, 12th floor, on 8 May 2008 starting at noon. ——————————————————————————– | Wulff-Group Plc | | (1 000 euro) | ——————————————————————————– ——————————————————————————– | CONSOLIDATED INCOME STATEMENT | 1-3/2008 | 1-3/2007 | 1-12/2007 | ——————————————————————————– ——————————————————————————– | TURNOVER | 19 148 | 16 925 | 74 087 | ——————————————————————————– ——————————————————————————– | Other operating income | 442 | 80 | 3 727 | ——————————————————————————– ——————————————————————————– | Materials and services | 10 370 | 8 945 | 39 456 | ——————————————————————————– | Employee benefits expenses | 4 868 | 4 175 | 17 644 | ——————————————————————————– | Depreciation and amortization | 292 | 299 | 1 735 | ——————————————————————————– | Other operating expenses | 3 681 | 3 413 | 13 581 | ——————————————————————————– ——————————————————————————– | OPERATING PROFIT | 378 | 172 | 5 399 | ——————————————————————————– ——————————————————————————– | Financial income and expenses | -328 | -51 | -852 | ——————————————————————————– ——————————————————————————– | PROFIT BEFORE EXTRAORDINARY ITEMS | 50 | 121 | 4 547 | | AND TAXES | | | | ——————————————————————————– ——————————————————————————– | Extraordinary items | 0 | 0 | 0 | ——————————————————————————– ——————————————————————————– | PROFIT BEFORE TAXES | 50 | 121 | 4 547 | ——————————————————————————– ——————————————————————————– | Income taxes | 163 | 180 | 1 353 | ——————————————————————————– | Minority interest | 79 | 11 | 166 | ——————————————————————————– ——————————————————————————– | NET PROFIT | -192 | -70 | 3 028 | ——————————————————————————– ——————————————————————————– | CONSOLIDATED BALANCE SHEET | | (1 000 euro) | ——————————————————————————– ——————————————————————————– | Assets | 31.3.2008 | 31.3.2007 | 31.12.2007 | ——————————————————————————– | | | | | ——————————————————————————– | FIXES ASSETS | | | | ——————————————————————————– ——————————————————————————– | Intangible assets | 627 | 439 | 587 | ——————————————————————————– | Goodwill | 7 204 | 4 903 | 7 204 | ——————————————————————————– | Tangible assets | 2 507 | 4 979 | 2 829 | ——————————————————————————– | Investments held for sale | 318 | 328 | 310 | ——————————————————————————– | Investments | 144 | 148 | 144 | ——————————————————————————– | Deferred tax assets | 992 | 1 026 | 954 | ——————————————————————————– | | | | | ——————————————————————————– | TOTAL FIXED ASSETS | 11 792 | 11 823 | 12 028 | ——————————————————————————– ——————————————————————————– | CURRENT ASSETS | | | | ——————————————————————————– | Inventories | 10 587 | 10 726 | 10 903 | ——————————————————————————– | Trade receivables | 8 091 | 7 826 | 8 292 | ——————————————————————————– | Other receivables | 4 205 | 3 714 | 4 796 | ——————————————————————————– | Cash and cash equivalents and | 5 805 | 6 311 | 6 316 | | financial assets recognised at fair | | | | | value | | | | ——————————————————————————– ——————————————————————————– | TOTAL CURRENT ASSETS | 28 688 | 28 576 | 30 306 | ——————————————————————————– ——————————————————————————– | TOTAL ASSETS | 40 480 | 40 400 | 42 335 | ——————————————————————————– ——————————————————————————– ——————————————————————————– | Equity and liabilities | 31.3.2008 | 31.3.2007 | 31.12.2007 | ——————————————————————————– ——————————————————————————– | EQUITY | | | | ——————————————————————————– | Share capital | 2 602 | 2 603 | 2 603 | ——————————————————————————– | Share premium fund | 7 662 | 7 662 | 7 662 | ——————————————————————————– | Retained earnings | 9 279 | 7 146 | 6 293 | ——————————————————————————– | Net profit | -192 | -70 | 3 028 | ——————————————————————————– ——————————————————————————– | Minority interest | 1 049 | 866 | 1 048 | ——————————————————————————– ——————————————————————————– | TOTAL EQUITY | 20 400 | 18 207 | 20 634 | ——————————————————————————– ——————————————————————————– | LIABILITIES | | | | ——————————————————————————– | Long-term interest-bearing | 7 634 | 8 285 | 7 713 | | liabilities | | | | ——————————————————————————– | Short-term liabilities | 12 446 | 13 908 | 13 987 | ——————————————————————————– ——————————————————————————– | TOTAL LIABILITIES | 20 079 | 22 192 | 21 701 | ——————————————————————————– ——————————————————————————– | TOTAL EQUITY AND LIABILITIES | 40 480 | 40 400 | 42 335 | ——————————————————————————– ——————————————————————————– | CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Jan 1st – Mar 31st 2008 | ——————————————————————————– | | (1 000 euro) | ——————————————————————————– ——————————————————————————– | | Share | Share | Retain- | Total | Minor- | Total | | | capita | premium | ed | | ity | | | | l | fund | earn- | | inte- | | | | | | ings | | rest | | ——————————————————————————– | | | | | | | | ——————————————————————————– | Equity Jan 1 2008 | 2 603 | 7 662 | 9 321 | 19 586 | 1 048 | 20 634 | ——————————————————————————– ——————————————————————————– | Net profit | | | -192 | | 79 | -113 | ——————————————————————————– ——————————————————————————– | Dividends paid | | | 0 | | -80 | -80 | ——————————————————————————– ——————————————————————————– | Investments held | | | 8 | | | 8 | | for sale: | | | | | | | | Valuation gains | | | | | | | | or losses | | | | | | | | recognised under | | | | | | | | shareholders’ | | | | | | | | equity | | | | | | | ——————————————————————————– ——————————————————————————– | Translation | | | 3 | | 2 | 5 | | differences | | | | | | | ——————————————————————————– ——————————————————————————– | Treasury shares | | | -52 | | | -52 | | acquired | | | | | | | ——————————————————————————– ——————————————————————————– | Taxes related to | | | -2 | | | -2 | | items recognised | | | | | | | | under | | | | | | | | shareholders’ | | | | | | | | equity | | | | | | | ——————————————————————————– ——————————————————————————– | Equity Mar 31 | 2 603 | 7 662 | 9 086 | 19 351 | 1 049 | 20 400 | | 2008 | | | | | | | ——————————————————————————– ——————————————————————————– | CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Jan 1st – Mar 31st 2007 | ——————————————————————————– | | | | | | (1 000 euro) | ——————————————————————————– ——————————————————————————– | | Share | Share | Retain- | Total | Minor- | Total | | | capita | premium | ed | | ity | | | | l | fund | earn- | | inte- | | | | | | ings | | rest | | ——————————————————————————– | | | | | | | | ——————————————————————————– | Equity Jan 1 2007 | 2 603 | 7 662 | 7 036 | 17 301 | 889 | 18 190 | ——————————————————————————– ——————————————————————————– | Net profit | | | -70 | | 11 | -59 | ——————————————————————————– ——————————————————————————– | Dividends paid | | | 0 | | -34 | -34 | ——————————————————————————– ——————————————————————————– | Investments held | | | 93 | | | 93 | | for sale: | | | | | | | | Valuation gains | | | | | | | | or losses | | | | | | | | recognised under | | | | | | | | shareholders’ | | | | | | | | equity | | | | | | | ——————————————————————————– ——————————————————————————– | Financial | | | 34 | | | 34 | | instruments | | | | | | | | recognised under | | | | | | | | shareholders’ | | | | | | | | equity | | | | | | | ——————————————————————————– ——————————————————————————– | Translation | | | 7 | | | 7 | | differences | | | | | | | ——————————————————————————– ——————————————————————————– | Taxes related to | | | -24 | | | -24 | | items recognised | | | | | | | | under | | | | | | | | shareholders’ | | | | | | | | equity | | | | | | | ——————————————————————————– ——————————————————————————– | Equity Mar 31 | 2 603 | 7 662 | 7 076 | 17 341 | 866 | 18 207 | | 2007 | | | | | | | ——————————————————————————– ——————————————————————————– | KEY RATIOS | | (1 000 euro) | ——————————————————————————– ——————————————————————————– | | 1-3/2008 | 1-3/2007 | 1-12/2007 | ——————————————————————————– ——————————————————————————– | Turnover | 19 148 | 16 925 | 74 087 | ——————————————————————————– | Increase in turnover % | 13.1 % | 14.1 % | 19.4 % | ——————————————————————————– ——————————————————————————– | Operating profit | 378 | 172 | 5 399 | ——————————————————————————– | % of turnover | 2.0 % | 1.0 % | 7.3 % | ——————————————————————————– ——————————————————————————– | Profit before taxes | 50 | 121 | 4 547 | ——————————————————————————– | % of turnover | 0.3 % | 0.7 % | 6.1 % | ——————————————————————————– ——————————————————————————– | Net profit | -192 | -70 | 3 028 | ——————————————————————————– | % of turnover | -1.0 % | -0.4 % | 4.1 % | ——————————————————————————– ——————————————————————————– | Equity ratio % | 50.4 % | 45.1 % | 48.7 % | ——————————————————————————– ——————————————————————————– | Investments in fixed assets | 194 | 301 | 1 171 | ——————————————————————————– | % of turnover | 1.0 % | 1.8 % | 1.6 % | ——————————————————————————– ——————————————————————————– | Average number of personnel | 461 | 417 | 440 | ——————————————————————————– | Number of personnel at end of period | 455 | 422 | 467 | ——————————————————————————– ——————————————————————————– | Earnings per share, euro | -0.03 | -0.01 | 0.47 | ——————————————————————————– ——————————————————————————– | Equity per share, euro | 3.14 | 2.66 | 3.17 | ——————————————————————————– ——————————————————————————– | CONSOLIDATED CASH FLOW | | (1 000 euro) | ——————————————————————————– | | 1-3/2008 | 1-3/2007 | 1-12/2007 | ——————————————————————————– | Cash flow from operations: | | | | ——————————————————————————– | Payments received from sales | 19 349 | 17 972 | 74 328 | ——————————————————————————– | Payments received from other operating | 25 | 0 | 227 | | income | | | | ——————————————————————————– | Amounts paid for operating expenses | -18 920 | -17 169 | -71 820 | ——————————————————————————– | Cash flow from business operations | 455 | 802 | 2 735 | | before financial items and taxes | | | | ——————————————————————————– | Financial costs paid | -56 | -82 | -641 | ——————————————————————————– | Interests received from operations | 35 | 31 | 146 | ——————————————————————————– | Direct taxes paid | -25 | -46 | -131 | ——————————————————————————– | Cash flow from operations | 409 | 705 | 2 109 | ——————————————————————————– ——————————————————————————– | Cash flow from investment activities: | | | | ——————————————————————————– | Investments in tangible and intangible | -175 | -290 | -1 070 | | assets | | | | ——————————————————————————– | Sale of tangible and intangible assets | 690 | 42 | 6 709 | ——————————————————————————– | Acquisition of shares in subsidiaries | -72 | 0 | -1 373 | ——————————————————————————– | Sale of shares in subsidiaries | 0 | 0 | 0 | ——————————————————————————– | Sale of other investments | 0 | 179 | 0 | ——————————————————————————– | Loans granted | 0 | 0 | -414 | ——————————————————————————– | Cash flow from investment activities | 443 | -69 | 3 852 | ——————————————————————————– ——————————————————————————– | Cash flow from financing activities: | | | | ——————————————————————————– | Paid dividends | -80 | -40 | -867 | ——————————————————————————– | Received dividends | 21 | 140 | 465 | ——————————————————————————– | Short-term investments (increase -) | -1 157 | -952 | -198 | ——————————————————————————– | Loss from the sale of short-term | -259 | -275 | 0 | | investments | | | | ——————————————————————————– | Loan withdrawals | 0 | 0 | 1 128 | ——————————————————————————– | Loan repayments | -286 | 0 | -2 300 | ——————————————————————————– | Cash flow from financing activities | -1 761 | -1 127 | -1 772 | ——————————————————————————– ——————————————————————————– | Change in liquid assets | -909 | -491 | 4 189 | ——————————————————————————– ——————————————————————————– | KEY RATIOS PER QUARTER | | (1 000 euro) | ——————————————————————————– ——————————————————————————– | | 1-3/08 | 10-12/0 | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/0 | | | | 7 | | | | 6 | ——————————————————————————– | Turnover | 19 148 | 22 200 | 16 358 | 18 604 | 16 925 | 18 864 | | (1000 euro) | | | | | | | ——————————————————————————– | Operating profit | 378 | 4 095 | 204 | 928 | 172 | 1 033 | | (1000 euro) | | | | | | | ——————————————————————————– | Net profit | -192 | 2 616 | -5 | 487 | -70 | 659 | | (1000 euro) | | | | | | | ——————————————————————————– | Earnings per | -0.03 | 0.40 | 0.00 | 0.07 | -0.01 | 0.10 | | share, euro | | | | | | | ——————————————————————————– WULFF-GROUP PLC Board of Directors www.wulff-group.com Further information: Heikki Vienola, CEO Tel. +358 9 5259 0050 or +358 50 65 110 e-mail: heikki.vienola@wulff.fi Sirpa Väisänen, IR Officer Tel. +358 9 5259 0050 or +358 400 943 243 e-mail: sirpa.vaisanen@wulff.fi Distribution: OMX Nordic Exchange Helsinki Key media www.wulff-group.com