WULFF GROUP PLC'S INTERIM REPORT FOR JANUARY 1 – SEPTEMBER 30, 2010

WULFF GROUP PLC

INTERIM REPORT November 10, 2010 at 9:00 A.M.

WULFF GROUP PLC’S INTERIM REPORT FOR JANUARY 1 – SEPTEMBER 30, 2010

– Net sales in the third quarter totalled EUR 20.4 million with an increase of 16.3 percentages from the comparable period last year (EUR 17.6 million). Net sales for the first nine months increased strongly by 34.6 percentages up to EUR 66.0 million from last year’s comparable period (EUR 49.1 million). The sales increase was due to the acquisition of Wulff Supplies Ab which operates in Sweden, Norway and Denmark and since the end of July 2009 is part of Wulff Group.

– The integration of Wulff Supplies with Wulff Group has been managed with success. The Nordic cooperation and the synergies in e.g. purchases give the customers even more competitive products and services. Wulff Supplies has managed to increase its market share and win new customers.

– EBITDA in the third quarter was EUR 0.23 million being EUR 0.16 million higher than in the comparable period (EUR 0.07 million). In January-September 2010, the EBITDA was EUR 0.29 million (EUR 0.42 million).

– In the third quarter, the operating loss of EUR 0.41 million including the one-time impairment expense (EUR -0.35 million) was at the comparable period’s level (EUR 0.43 million). The operating loss totalled EUR 0.86 million for the nine-month period compared to the operating loss of EUR 0.50 million a year ago.

– Loss before taxes totalled EUR 0.33 million (EUR 0.49 million) in July-September and EUR 0.57 million (EUR 0.66 million) in the first nine months.

– After deducting the minority shareholders’ profit share, the net loss attributable to the equity holders of the parent company was at last year’s level for the nine months and for the quarter. Earnings per share were EUR -0.14 (EUR -0.14) for the nine-month period and EUR -0.09 (EUR -0.09) for the third quarter.

GROUP’S NET SALES AND PERFORMANCE

Net sales in the third quarter totalled EUR 20.4 million with an increase of 16.3 percentages from the comparable period last year (EUR 17.6 million). Net sales for the first nine months increased strongly by 34.6 percentages up to EUR 66.0 million from last year’s comparable period (EUR 49.1 million). The sales increase was due to the acquisition of Wulff Supplies Ab which operates in Sweden, Norway and Denmark and since the end of July 2009 is part of Wulff Group. Wulff Group’s CEO Heikki Vienola: “All our strategic and operative decisions aim to serving our customers even better and to making profitable business. The sales growth proves that our decisions and actions have been good. We focus strongly on sales and its improvement also in the future. Closer co-operation between our Nordic companies and utilizing new synergies constantly are key factors in the future performance. Along the economic growth and our customers’ success, the demand for our services and products will increase. We expect the increase of the markets to affect quickly our sales growth.” EBITDA in the third quarter was EUR 0.23 million being EUR 0.16 million higher than in the comparable period (EUR 0.07 million). In January-September 2010, the EBITDA of EUR 0.29 million i.e. 0.4 percentage of net sales was lower than in the comparable period last year (EUR 0.42 million; 0.9 %). The Group continues to review its cost structure and performance efficiency with a focus on improving the profitability of all its operations. In the third quarter, the operating loss of EUR 0.41 million including the one-time impairment expense (EUR -0.35 million) was at the comparable period’s level (EUR 0.43 million). The operating loss totalled EUR 0.86 million for the nine-month period compared to the operating loss of EUR 0.50 million a year ago. The operating loss was 1.3 percentage (1.0 %) of the net sales in the first nine months. The fair and event marketing company Entre Marketing Oy has made a loss this year and the goodwill arising from its acquisition was impaired by EUR 0.35 million as of September 30, 2010. In the comparable period last year, the operating loss was impacted by a one-time impairment (EUR 0.28 million) related to the divestment of the subsidiaries Everyman Oy and Officeman Oy. The financial income and expenses totalled (net) EUR +0.29 million (EUR -0.16 million) including dividend income of EUR 0.15 million, interest expenses of EUR 0.19 million and other financial items (net) of EUR +0.33 million. For the third quarter, the net financial income and expenses were EUR +0.08 million (EUR -0.06 million). Loss before taxes totalled EUR 0.33 million (EUR 0.49 million) in July-September and EUR 0.57 million (EUR +0.66 million) in January-September. After deducting the minority shareholders’ profit share, the net loss attributable to the equity holders of the parent company was at last year’s level for the nine months and for the quarter. The net loss attributable to the equity holders of the parent company totalled EUR 0.93 million (EUR 0.95 million) in January-September and EUR 0.56 million (EUR 0.58 million) in July-September. Earnings per share were EUR -0.14 (EUR -0.14) for the nine-month period and EUR -0.09 (EUR -0.09) for the third quarter. The return on investment (ROI) was -1.34 percentage (-1.32 %) for January-September and -1.17 percentage (-1.31 %) for July-September. The return on equity (ROE) was -4.18 percentage (-4.58 %) for January-September and -2.88 percentage (-2.73 %) for the third quarter.

CONTRACT CUSTOMERS DIVISION

The Contract Customers Division is a comprehensive partner for customers in the field of office supplies, business and promotional gifts as well as fair and event marketing services. In January-September, the segment’s net sales (EUR 54.9 million) increased by EUR 19.2 million i.e. 54 percentages year-on-year (EUR 35.6 million) due to Wulff Supplies which has been consolidated since the beginning of August 2009 and is part of the Contract Customer Division. In July-September, the division’s net sales totalled EUR 17.3 million (EUR 14.3 million). Wulff Supplies, which operates in Scandinavia, has managed to both increase its market share and win new customers constantly. The new efficient logistic center opened in Ljungby, Sweden, in the summer 2010, enables serving the customers even better and is an investment in the future growth. Also several development initiatives bring cost savings in the Group’s operations. The Group has good possibilities to serve even more Nordic customers in the future which makes the development of pan-Nordic operational concept important. The integration of Wulff Supplies with Wulff Group has been managed with success. The Nordic cooperation and the synergies, in purchases for example, give the customers even more competitive products and services. During the past 120 years, the Finnish Wulff Oy is known for being a pioneer in its branch. In 2010, Wulff has invested remarkably in the launch, development and marketing of the new webstore Wulffinkulma.fi. Constantly during the year, the webstore has brought new customers which will support the Group’s growth. To strengthen its status as the industry’s e-commerce pioneer, Wulff continues to take strong efforts in the constant development and marketing of the webstore also in the fourth quarter of 2010. The webstore serves its customers with a product range of nearly 4,000 products. The financial performance of the Contract Customers Division was not as good as in the comparable period last year. The nine-month operating result excluding the one-time goodwill impairment (EUR 0.35 million) of the fair and event marketing company Entre Marketing Oy, was slightly negative (EUR -0.02 million) compared to the operating profit of EUR 0.19 million a year ago. For the third quarter, the division’s operating result excluding the non-recurring impairment was a profit of EUR 0.04 million whereas a loss of EUR 0.15 million was incurred in the comparable period last year. The reported operating loss including the non-recurring impairment amounted to EUR 0.37 million (EUR +0.19 million) in the nine-month period and EUR 0.31 million (EUR -0.15 million) in the third quarter. The fair and event marketing company Entre Marketing Oy has made a loss this year and based on its goodwill impairment testing, an impairment of EUR 0.35 million was made impacting the division’s operating result in the third quarter. Along the changes made in the subsidiary’s financial management during the summer 2010, the parent company acquired the minority shares (1 %) from the employee leaving the Group. Now the Group’s ownership in Entre Marketing Oy is 84 percentages. The economic slowdown has impacted especially the demand for business and promotional gifts. The business has made losses in 2010 but historically the demand for business and promotional gifts has been greatest during the Christmas season in the fourth quarter. The improvement of the economic situation increases also the demand for business and promotional gifts.

DIRECT SALES DIVISION

The Direct Sales Division aims to improve its customers’ daily operations with innovative products and the industry’s most professional personal, local service. In the third quarter, the division’s net sales (EUR 3.1 million) were at last year’s level (EUR 3.1 million) although the comparable period’s sales included the business of the subsidiaries Everyman Oy and Officeman Oy. In the nine-month period, the division’s net sales (EUR 11.3 million) were lower than a year ago (EUR 13.7 million) due to the divestment of former group companies Everyman Oy and Officeman Oy which were sold to the minority shareholders in September 2009. The Direct Sales Division’s operating result turned up to an operating profit of EUR 0.09 million this year (EUR -0.54 million). In the third quarter, the division’s operating loss was EUR 0.02 million whereas in the comparable period last year, the operating loss of EUR 0.19 million was impacted by a one-time impairment (EUR 0.28 million) related to the divestment of the subsidiaries Everyman Oy and Officeman Oy. The division’s organizational changes in 2009 have been managed well and the improvement of the management practices continues, which has affected positively the profit of the Finnish direct sales companies. In order to achieve a good profitability level and financial result, the cost efficiency improvement initiatives will continue in all direct sales companies. The division focuses in improving the sales and supporting it with new methods, e.g. with e-marketing. In Lithuania, the small direct sales operations started last year were closed in summer 2010. For a sales company, the most important asset is its personnel. Capable persons make the growth possible and one of the most significant challenges for the Direct Sales division is to be able to recruit talented sales professionals. The Group invests in visibility and recruitment marketing in different media and aims to recruit several new direct sales employees in the Nordic countries. The recruiting cooperation with the governmental employment agency is developed constantly.

FINANCING, INVESTMENTS AND FINANCIAL POSITION

The cash flow from operating activities totalled EUR -1.49 million (EUR -0.63 million) in July-September and EUR -1.63 million (EUR +0.23 million) in the whole nine-month period. Historically the operating cashflow is negative in the third quarter due to the summer holiday season when product deliveries and sales invoicing are small. In addition to the profitability improvement initiatives, the Group aims to improve the working capital management and increase the cash flow from operating activities significantly. In January-September 2010, a total of EUR 1.26 million was used in investing activities including investments in intangible and tangible assets (EUR 1.20 million), payment of the additional acquisition price debt related to subsidiary Ibero Liikelahjat Oy (EUR 0.19 million), payment for the acquisition of the subsidiary Entre Marketing Oy’s minority shares (EUR 0.03 million) and proceeds from the sale of intangible and tangible assets (EUR +0.15 million). During the period, investments were made in e.g. Wulff Supplies’ new logistics center in Ljungby, Sweden. Investments in the third quarter totalled EUR 0.59 million. In the comparable period January-September 2009, a total of EUR 2.32 million was used in investing activities including investments in intangible and tangible assets (EUR 0.51 million), the acquisitions of subsidiaries (EUR -2.14 million), proceeds from the divestment of subsidiaries (EUR +0.24 million) and proceeds from the sale of intangible and tangible assets (EUR +0.09 million). In July-September 2009, the net investments totalled EUR 1.86 million. During the nine-month period, the cash flow used in financing activities totalled EUR -0.67 million (EUR +1.47 million). The withdrawals and repayments of long- and short-term loans totalled net EUR 0.21 million whereas new funding was raised net of EUR 2.10 million for financing the acquisition of Wulff Supplies a year ago. The acquisition of own shares totalled EUR 0.09 million (EUR 0.05 million) and the net change in short-term investments amounted to EUR 0.06 million (EUR 0.19 million). Dividends of EUR 0.15 million (EUR 0.01 million) were received. The parent company shareholders were paid dividends of EUR 0.33 million (EUR 0.33 million) and the minority shareholders of the subsidiaries were paid dividends of EUR 0.14 million (EUR 0.06 million). During the third quarter, the financing cash flow received was EUR 0.50 million (EUR 2.17 million). In general, the net decrease in cash and cash equivalents was EUR -3.55 million in January-September (EUR -0.63 million) and EUR -1.58 million (EUR -0.31 million) in July-September. The equity attributable to the equity holders of the parent company totalled EUR 2.48 per share (EUR 2.66) and the equity-to-assets ratio was 39.1 percentage (41.8 %).

DECISIONS OF THE ANNUAL GENERAL MEETING

Wulff Group Plc’s Annual General Meeting held on April 23, 2010 decided to pay a dividend of EUR 0,05 per share and authorised the Board of Directors to decide on the repurchase of the company’s own shares. The Annual General Meeting accepted also the Board’s proposal concerning the authorisation to perform share issues. The Annual General Meeting adopted the financial statements for the financial year 2009 and discharged the members of the Board of Directors and CEO from liability. Due to a change in the legislation, the Annual General Meeting decided to amend the Articles of Association in a way that the invitations to the General Meetings are delivered at least 21 days prior to the General Meeting, but not later than nine days before the General Meeting record date. The amendment of the Articles of Association was entered in the Finnish Trade Register on June 8, 2010 which was announced in a stock exchange release on the same day. The current Articles of Association are available on the Group’s website www.wulff-group.com. The previous Board members Ere (Erkki) Kariola, Ari Pikkarainen, Pentti Rantanen, Saku (Sakari) Ropponen and Heikki Vienola were re-elected and Andreas Tallberg was elected as a new member of the Board. The organising meeting of the Board of Directors, held after the Annual General Meeting, decided that the new Chairman of the Board is Saku (Sakari) Ropponen. The shareholders attending the Annual General Meeting held on April 23, 2010 were informed that Nexia Tilintarkastus Oy, Authorised Public Accountants, and Juha Lindholm, Certified Auditor, continued operating as the Company’s auditors and Seppo Tervo, Authorised Public Accountant, started as the new lead auditor. Due to Nexia Tilintarkastus Oy’s organizational changes in September 2010, Wulff Group Plc’s new lead auditor is now Christer Antson, Authorised Public Accountant.

SHARES AND SHARE CAPITAL

Based on the authorization of the Annual General Meeting held on April 24, 2009, the acquisition of own shares continued in 2010. In the end of December 2009, the parent company held a total of 69 022 own shares and in the first quarter of 2010, 2 807 own shares were repurchased and 5 000 own shares were allocated to the Group’s key person as a part of the share-based incentive plan decided in 2008. In the end of March 2010, the Group held a total of 66 829 own shares (24 956 as of March 31, 2009) representing 1.0 percentage (0.4 %) of the total number and voting rights of Wulff shares. The average price for the own shares repurchased in January-March was EUR 3.25 per share. Authorized by the Annual General Meeting held on April 23, 2010, the Board of Directors decided in its organizing meeting to continue buying back a maximum of 300,000 own shares by the next Annual General Meeting. The reacquisition of own shares continued in May and in the end of September 2010 the Group held 90 056 own shares (36 583 shares as of September 30, 2009) which represents 1.4 percentage (0.6 %) of the total number and voting rights of Wulff shares. The average price for the own shares repurchased in January-September was EUR 3.27 per share. The shares are acquired through public trading on NASDAQ OMX Helsinki in a proportion other than that of current shareholder holdings. The shares are acquired at the market price quoted at the time of the repurchase in accordance with the rules regarding the acquisition of company’s owns shares. 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 Group does not have any option schemes currently in force. The parent company’s share capital (EUR 2.65 million) consists of 6 607 628 shares with one vote each. There have been no changes in share capital in 2009 and 2010. There have been no disclosed notifications on changes in major holdings during 2009 and 2010. Wulff Group Plc’ share is listed on NASDAQ OMX Helsinki in the Small Cap segment under the Consumer Discretionary sector. The company’s trading code is WUF1V. In the end of September 2010, the share was valued at EUR 2.76 (EUR 3.65 as of September 30, 2009) and the market capitalization of the outstanding shares totalled EUR 18.0 million (EUR 24.0 million as of September, 2009).

PERSONNEL

During the nine-month period, the Group’s personnel totalled 384 (397) employees on average. In the end of September 2010, the Group had 391 (383) employees of which 138 (110) persons were employed in Sweden, Norway, Denmark and Estonia. The operations in Lithuania were closed down in summer 2010. The majority, approximately 60 percentages of the Group’s personnel works in sales operations and 40 percentages work in logistics and administration. Wulff employees equally both genders: in the end of September 2010, men represented 54 percentages and women 46 percentages of the employees. In order to increase the organic growth, the Group focuses on recruiting sales personnel. The Group continues the close cooperation with the employment authorities and the educational institutions. Along with the web-based recruitment methods, the Group participates different happenings and takes personal contact with potential sales talents. The Group aims to increase its sales personnel in all units still during 2010.

ORGANIZATION CHANGE

In August 2010, organizational changes were made in Contract Customers Division when the management changed in Wulff Oy and its subsidiary Torkkelin Paperi Oy, located in Lahti, Finland. The initiatives aim to utilize the management’s competencies even broader, to rationalize the operations and decrease the administrational costs. Juha Broman, who has led Wulff Oy since 2005 and has a three-decade-long experience in the industry, focuses his skills in the development of Torkkelin Paperi’s operations and started as its new managing director in November. Wulff Oy is now led by the new managing director Jani Puroranta, previously Head of Contract Customers Division. Torkkelin Paperi Oy’s previous managing director Pekka Lähde continues working as the company’s sales director.

RISKS AND UNCERTAINTIES IN THE NEAR FUTURE

The economic downturn in the Nordic countries has clearly affected the demand for office supplies. The general uncertainty may continue the entire year 2010 which will most likely affect the ordering behaviour of some corporate clients also in the coming months. The improvement of the economic situation is expected to affect quickly the demand for office supplies. The possibly ongoing economic slowdown impacts especially the demand for business and promotional gifts. Although the business gifts are seen increasingly as a part of the corporate communications as a whole and they are utilized also in the off-season, some cost savings may be sought after by decreasing the investments in the brand promotion. In the economic downturn, the corporations also minimize attending fairs and decrease their event marketing activities.

MARKET SITUATION AND OUTLOOK FOR 2010

Along with the global economic downturn, also the markets for office supplies have decreased notably in the countries where the Group operates. In the Nordic countries last year, the markets for office supplies decreased some 10 percentages and the markets for business and promotional gifts were impacted with a decrease of nearly a third. The Estonian markets for corporate promotional products decreased even more. In 2010, the markets are expected to remain the same size as in 2009 or to grow slightly. Wulff’s mission is to help its corporate customers to succeed in their own business by providing them with leading-edge products and services cost-efficiently in a way best suitable to them. Being the front-runner in its field, Wulff’s latest acquisition was Strålfors Supplies Ab (Wulff Supplies since January 1, 2010) in July 2009, which strengthened the Group’s position in the Nordic office supply markets and the Group became the most significant Nordic player in office supplies. The industry consolidation continues and the Group expects that the international operators continue increasing their market shares. In summer 2010, internationally operating companies acquired Finnish office supplies companies: Staples acquired Oy Lindell Ab in July 2010 and Lyreco acquired Officeday Finland Oy from Arion bank in August. Historically, Wulff Group’s business experiences seasonal fluctuation and a significant part of the Group’s net sales and profit is generated in the fourth quarter. In 2010, the Group continues to take action for enhancing profitability. The Group focuses on the growth and development of its sales operations. In 2010, the Group expects to win new customers and gain growth in Scandinavia especially along with Wulff Supplies Ab and in Finland with the webstore Wulffinkulma.fi. The Group expects its net sales to grow remarkably from last year. Wulff is also prepared to carry out new strategic acquisitions. The group management believes that the financial result 2010 will be at last year’s level.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ——————————————————————————– | INCOME STATEMENT | III | III | I-III | I-III | I-IV | ——————————————————————————– | EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 | ——————————————————————————– | Net sales | 20 435 | 17 570 | 66 035 | 49 061 | 74 785 | ——————————————————————————– | Other operating income | 108 | 136 | 373 | 340 | 402 | ——————————————————————————– | Materials and services | -13 496 | -10 825 | -43 133 | -28 265 | -45 445 | ——————————————————————————– | Employee benefit expenses | -3 792 | -3 494 | -13 546 | -11 489 | -15 980 | ——————————————————————————– | Other operating expenses | -3 028 | -3 321 | -9 438 | -9 224 | -12 515 | ——————————————————————————– | EBITDA | 228 | 66 | 291 | 423 | 1 247 | ——————————————————————————– | Depreciation and | -289 | -214 | -802 | -645 | -940 | | amortization | | | | | | ——————————————————————————– | Impairment | -350 | -280 | -350 | -280 | -460 | ——————————————————————————– | Operating profit/loss | -411 | -428 | -861 | -502 | -154 | ——————————————————————————– | Financial income | 177 | 46 | 690 | 154 | 275 | ——————————————————————————– | Financial expenses | -93 | -106 | -400 | -311 | -481 | ——————————————————————————– | Profit/Loss before taxes | -327 | -488 | -571 | -659 | -360 | ——————————————————————————– | Income taxes | -185 | -27 | -191 | -223 | -284 | ——————————————————————————– | Net profit/loss for the | -513 | -515 | -762 | -882 | -644 | | period | | | | | | ——————————————————————————– ——————————————————————————– | Attributable to: | | | | | | ——————————————————————————– | Equity holders of the | -557 | -581 | -931 | -947 | -782 | | parent company | | | | | | ——————————————————————————– | Minority interest | 45 | 66 | 169 | 65 | 138 | ——————————————————————————– ——————————————————————————– | Earnings per share for | | | | | | | profit | | | | | | ——————————————————————————– | attributable to the | | | | | | | equity holders | | | | | | ——————————————————————————– | of the parent company: | | | | | | ——————————————————————————– | Earnings per share, EUR | -0,09 | -0,09 | -0,14 | -0,14 | -0,12 | ——————————————————————————– | (diluted = non-diluted) | | | | | | ——————————————————————————– ——————————————————————————– ——————————————————————————– | STATEMENT OF | III | III | I-III | I-III | I-IV | | COMPREHENSIVE INCOME | | | | | | ——————————————————————————– | EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 | ——————————————————————————– | Net profit/loss for the | -513 | -515 | -762 | -882 | -644 | | period | | | | | | ——————————————————————————– | Other comprehensive | | | | | | | income, net of tax | | | | | | ——————————————————————————– | Change in translation | 153 | 58 | 93 | 3 | 39 | | differences | | | | | | ——————————————————————————– | Fair value changes on | -1 | 12 | -15 | 62 | -4 | | available-for-sale | | | | | | | investments | | | | | | ——————————————————————————– | Total other comprehensive | 152 | 70 | 78 | 65 | 35 | | income | | | | | | ——————————————————————————– | Total comprehensive | -360 | -445 | -684 | -817 | -609 | | income for the period | | | | | | ——————————————————————————– ——————————————————————————– | Total comprehensive | | | | | | | income attributable to: | | | | | | ——————————————————————————– | Equity holders of the | -451 | -478 | -918 | -883 | -797 | | parent company | | | | | | ——————————————————————————– | Minority interest | 91 | 33 | 234 | 66 | 188 | ——————————————————————————– ——————————————————————————– | STATEMENT OF FINANCIAL | | | Sept 30 | Sept 30 | Dec 31 | | POSITION | | | | | | ——————————————————————————– | EUR 1000 | | | 2010 | 2009 | 2009 | ——————————————————————————– | ASSETS | | | | | | ——————————————————————————– | Non-current assets | | | | | | ——————————————————————————– | Goodwill | | | 10 622 | 10 824 | 10 658 | ——————————————————————————– | Other intangible assets | | | 1 266 | 1 347 | 1 257 | ——————————————————————————– | Property, plant and | | | 2 267 | 2 073 | 1 952 | | equipment | | | | | | ——————————————————————————– | Non-current financial | | | | | | | assets | | | | | | ——————————————————————————– | Interest-bearing | | | 79 | | | | financial assets | | | | | | ——————————————————————————– | Non-interest-bearing | | | 321 | 416 | 337 | | financial assets | | | | | | ——————————————————————————– | Deferred tax assets | | | 1 236 | 810 | 1 066 | ——————————————————————————– | Total non-current assets | | | 15 791 | 15 470 | 15 274 | ——————————————————————————– ——————————————————————————– | Current assets | | | | | | ——————————————————————————– | Inventories | | | 12 300 | 12 237 | 11 793 | ——————————————————————————– | Current receivables | | | | | | ——————————————————————————– | Interest-bearing | | | 7 | | | | receivables | | | | | | ——————————————————————————– | Non-interest-bearing | | | 15 424 | 14 987 | 13 246 | | receivables | | | | | | ——————————————————————————– | Financial assets | | | | 61 | 58 | | recognised at fair value | | | | | | | through profit and loss | | | | | | ——————————————————————————– | Cash and cash equivalents | | | 1 785 | 4 002 | 5 337 | ——————————————————————————– | Total current assets | | | 29 517 | 31 287 | 30 434 | ——————————————————————————– |   | | |   |   |   | ——————————————————————————– | TOTAL ASSETS | | | 45 308 | 46 757 | 45 708 | ——————————————————————————– ——————————————————————————– | EQUITY AND LIABILITIES | | | | | | ——————————————————————————– | Equity | | | | | | ——————————————————————————– | Equity attributable to | | | | | | | the equity holders of the | | | | | | | parent company: | | | | | | ——————————————————————————– | Share capital | | | 2 650 | 2 650 | 2 650 | ——————————————————————————– | Share premium fund | | | 7 662 | 7 662 | 7 662 | ——————————————————————————– | Invested unrestricted | | | 223 | 223 | 223 | | equity fund | | | | | | ——————————————————————————– | Retained earnings | | | 5 602 | 6 930 | 6 944 | ——————————————————————————– | Minority interest | | | 1 448 | 1 153 | 1 364 | ——————————————————————————– | Total equity | | | 17 584 | 18 618 | 18 843 | ——————————————————————————– ——————————————————————————– | Non-current liabilities | | | | | | ——————————————————————————– | Interest-bearing | | | 8 443 | 9 623 | 8 266 | | liabilities | | | | | | ——————————————————————————– | Deferred tax liabilities | | | 144 | | 298 | ——————————————————————————– | Total non-current | | | 8 587 | 9 623 | 8 564 | | liabilities | | | | | | ——————————————————————————– ——————————————————————————– | Current liabilities | | | | | | ——————————————————————————– | Interest-bearing | | | 2 018 | 1 095 | 2 305 | | liabilities | | | | | | ——————————————————————————– | Non-interest-bearing | | | 17 119 | 17 421 | 15 996 | | liabilities | | | | | | ——————————————————————————– | Total current liabilities | | | 19 136 | 18 516 | 18 301 | ——————————————————————————– |   | | |   |   |   | ——————————————————————————– | TOTAL EQUITY AND | | | 45 308 | 46 757 | 45 708 | | LIABILITIES | | | | | | ——————————————————————————– ——————————————————————————– | STATEMENT OF CASH FLOW | III | III | I-III | I-III | I-IV | ——————————————————————————– | EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 | ——————————————————————————– ——————————————————————————– | Cash flow from operating | | | | | | | activities: | | | | | | ——————————————————————————– | Cash received from sales | 19 043 | 13 396 | 63 941 | 45 780 | 73 880 | ——————————————————————————– | Cash received from other | 90 | 106 | 292 | 201 | 320 | | operating income | | | | | | ——————————————————————————– | Cash paid for operating | -20 506 | -14 175 | -65 443 | -45 557 | -72 348 | | expenses | | | | | | ——————————————————————————– | Cash flow from operating | -1 373 | -673 | -1 210 | 424 | 1 852 | | activities before | | | | | | | financial items and | | | | | | | income taxes | | | | | | ——————————————————————————– | Interest paid | -66 | -37 | -226 | -275 | -408 | ——————————————————————————– | Interest received | 43 | 47 | 62 | 107 | 151 | ——————————————————————————– | Income taxes paid | -97 | 36 | -254 | -25 | -125 | ——————————————————————————– | Cash flow from operating | -1 492 | -627 | -1 628 | 231 | 1 470 | | activities | | | | | | ——————————————————————————– ——————————————————————————– | Cash flow from investing | | | | | | | activities: | | | | | | ——————————————————————————– | Investments in intangible | -585 | -62 | -1 195 | -512 | -810 | | and tangible assets | | | | | | ——————————————————————————– | Proceeds from sales of | 29 | 33 | 151 | 93 | 173 | | intangible and tangible | | | | | | | assets | | | | | | ——————————————————————————– | Acquisition of | -34 | -2 066 | -219 | -2 142 | -2 293 | | subsidiaries, net of cash | | | | | | ——————————————————————————– | Sale of subsidiaries, net | | 238 | | 238 | 426 | | of cash | | | | | | ——————————————————————————– | Repayments of loans | | | 4 | | | | receivable | | | | | | ——————————————————————————– | Cash flow from investing | -590 | -1 857 | -1 259 | -2 323 | -2 504 | | activities | | | | | | ——————————————————————————– ——————————————————————————– | Cash flow from financing | | | | | | | activities: | | | | | | ——————————————————————————– | Acquisition of own shares | -1 | -19 | -85 | -54 | -126 | ——————————————————————————– | Dividends paid | | -13 | -469 | -393 | -422 | ——————————————————————————– | Dividends received | 26 | | 149 | 8 | 8 | ——————————————————————————– | Cash paid for (received | 201 | -297 | -55 | -190 | -216 | | from) short-term | | | | | | | investments (net) | | | | | | ——————————————————————————– | Withdrawals of long- and | 297 | 2 700 | 914 | 2 700 | 3 494 | | short-term loans | | | | | | ——————————————————————————– | Repayments of long- and | -19 | -200 | -1 119 | -605 | -995 | | short-term loans | | | | | | ——————————————————————————– | Cash flow from financing | 503 | 2 171 | -666 | 1 466 | 1 743 | | activities | | | | | | ——————————————————————————– |   |   |   |   |   |   | ——————————————————————————– | Change in cash and cash | -1 579 | -313 | -3 553 | -626 | 709 | | equivalents | | | | | | ——————————————————————————– | Cash and cash equivalents | 3 364 | 4 315 | 5 337 | 4 628 | 4 628 | | at the beginning of the | | | | | | | period | | | | | | ——————————————————————————– | Cash and cash equivalents | 1 785 | 4 002 | 1 785 | 4 002 | 5 337 | | at the end of the period | | | | | | ——————————————————————————– ——————————————————————————– | STATEMENT OF CHANGES IN EQUITY | | | | | | ——————————————————————————– | EUR 1000 | Equity attributable to equity holders | | | | | of the parent company | | | ——————————————————————————– |   | Shar | Shar | Fund | Retai | Total | Minor | TOTAL | | | e | e | for | ned | | ity | | | | capi | pre- | inves | earni | | inter | | | | tal | mium | ted | ngs | | est | | | | | fund | non- | | | | | | | | | restr | | | | | | | | | icted | | | | | | | | | equit | | | | | | | | | y | | | | | ——————————————————————————– ——————————————————————————– | Equity on Jan 1, | 2 | 7 | 223 | 8 196 | 18 731 | 1 137 | 19 868 | | 2009 | 650 | 662 | | | | | | ——————————————————————————– | Comprehensive | | | | -883 | -883 | 66 | -817 | | income * | | | | | | | | ——————————————————————————– | Dividends paid | | | | -329 | -329 | -93 | -422 | ——————————————————————————– | Treasury share | | | | -54 | -54 | | -54 | | acquisition | | | | | | | | ——————————————————————————– | Divestment of | | | | | 0 | 43 | 43 | | subsidiaries | | | | | | | | ——————————————————————————– | Equity on Sept 30, | 2 | 7 | 223 | 6 930 | 17 465 | 1 153 | 18 618 | | 2009 | 650 | 662 | | | | | | ——————————————————————————– ——————————————————————————– ——————————————————————————– | Equity on Jan 1, | 2 | 7 | 223 | 8 196 | 18 731 | 1 137 | 19 868 | | 2009 | 650 | 662 | | | | | | ——————————————————————————– | Comprehensive | | | | -797 | -797 | 188 | -609 | | income * | | | | | | | | ——————————————————————————– | Dividends paid | | | | -329 | -329 | -93 | -422 | ——————————————————————————– | Treasury share | | | | -126 | -126 | | -126 | | acquisition | | | | | | | | ——————————————————————————– | Divestment of | | | | | 0 | -258 | -258 | | subsidiaries | | | | | | | | ——————————————————————————– | Changes in | | | | | 0 | 389 | 389 | | ownership | | | | | | | | ——————————————————————————– | Equity on Dec 31, | 2 | 7 | 223 | 6 944 | 17 479 | 1 364 | 18 843 | | 2009 | 650 | 662 | | | | | | ——————————————————————————– ——————————————————————————– ——————————————————————————– | Equity on Jan 1, | 2 | 7 | 223 | 6 944 | 17 479 | 1 364 | 18 843 | | 2010 | 650 | 662 | | | | | | ——————————————————————————– | Comprehensive | | | | -918 | -918 | 234 | -684 | | income * | | | | | | | | ——————————————————————————– | Dividends paid | | | | -327 | -327 | -145 | -472 | ——————————————————————————– | Treasury share | | | | -85 | -85 | | -85 | | acquisition | | | | | | | | ——————————————————————————– | Share-based | | | | 16 | 16 | | 16 | | payments | | | | | | | | ——————————————————————————– | Changes in | | | | -28 | -28 | -5 | -33 | | ownership | | | | | | | | ——————————————————————————– | Equity on Sept 30, | 2 | 7 | 223 | 5 602 | 16 137 | 1 448 | 17 584 | | 2010 | 650 | 662 | | | | | | ——————————————————————————– * net of tax NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ——————————————————————————– | SEGMENT INFORMATION | III | III | I-III | I-III | I-IV | ——————————————————————————– | EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 | ——————————————————————————– ——————————————————————————– | Net sales by operating | | | | | | | segments | | | | | | ——————————————————————————– | Contract Customers | 17 307 | 14 336 | 54 856 | 35 610 | 57 346 | | Division | | | | | | ——————————————————————————– | Direct Sales Division | 3 092 | 3 091 | 11 288 | 13 724 | 17 985 | ——————————————————————————– | Group Services | 292 | 431 | 1 008 | 1 440 | 986 | ——————————————————————————– | Intragroup eliminations | -256 | -288 | -1 118 | -1 713 | -1 531 | | between segments | | | | | | ——————————————————————————– | TOTAL NET SALES | 20 435 | 17 570 | 66 035 | 49 061 | 74 785 | ——————————————————————————– ——————————————————————————– | Operating profit/loss by | | | | | | | operating segments | | | | | | ——————————————————————————– | Contract Customers | 44 | -145 | -23 | 189 | 658 | | business | | | | | | ——————————————————————————– | Non-Recurring Impairment | -350 |   | -350 |   | -180 | ——————————————————————————– | Contract Customers | -306 | -145 | -373 | 189 | 478 | | Division Total | | | | | | ——————————————————————————– ——————————————————————————– | Direct Sales business | -22 | 89 | 89 | -255 | 28 | ——————————————————————————– | Non-Recurring Impairment |   | -280 |   | -280 | -280 | ——————————————————————————– | Direct Sales Division | -22 | -191 | 89 | -535 | -252 | | Total | | | | | | ——————————————————————————– ——————————————————————————– | Group Services and | -83 | -92 | -577 | -156 | -380 | | non-allocated items | | | | | | ——————————————————————————– | TOTAL OPERATING | -411 | -428 | -861 | -502 | -154 | | PROFIT/LOSS | | | | | | ——————————————————————————– ——————————————————————————– ——————————————————————————– | | III | III | I-III | I-III | I-IV | ——————————————————————————– | KEY FIGURES (EUR 1000) | 2010 | 2009 | 2010 | 2009 | 2009 | ——————————————————————————– | Net sales | 20 435 | 17 570 | 66 035 | 49 061 | 74 785 | ——————————————————————————– | Increase/Decrease in net | 16,3 % | 8,7 % | 34,6 % | -12,4 % | -1,8 % | | sales, % | | | | | | ——————————————————————————– | EBITDA | 228 | 66 | 291 | 423 | 1 247 | ——————————————————————————– | EBITDA margin, % | 1,1 % | 0,4 % | 0,4 % | 0,9 % | 1,7 % | ——————————————————————————– | Operating profit/loss | -411 | -428 | -861 | -502 | -154 | ——————————————————————————– | Operating profit/loss | -2,0 % | -2,4 % | -1,3 % | -1,0 % | -0,2 % | | margin, % | | | | | | ——————————————————————————– | Profit/Loss before taxes | -327 | -488 | -571 | -659 | -360 | ——————————————————————————– | Profit/Loss before taxes | -1,6 % | -2,8 % | -0,9 % | -1,3 % | -0,5 % | | margin, % | | | | | | ——————————————————————————– | Net profit/loss for the | -557 | -581 | -931 | -947 | -782 | | period attributable to | | | | | | | equity holders of the | | | | | | | parent company | | | | | | ——————————————————————————– | Net profit/loss for the | -2,7 % | -3,3 % | -1,4 % | -1,9 % | -1,0 % | | period, % | | | | | | ——————————————————————————– | Earnings per share, EUR | -0,09 | -0,09 | -0,14 | -0,14 | -0,12 | | (diluted = non-diluted) | | | | | | ——————————————————————————– | Return on equity (ROE), % | -2,88 % | -2,73 % | -4,18 % | -4,58 % | -3,32 % | ——————————————————————————– | Return on investment | -1,17 % | -1,31 % | -1,34 % | -1,32 % | 0,19 % | | (ROI), % | | | | | | ——————————————————————————– | Equity-to-assets ratio at | 39,1 % | 41,8 % | 39,1 % | 41,8 % | 43,6 % | | the end of period, % | | | | | | ——————————————————————————– | Debt-to-equity ratio at | 48,8 % | 36,1 % | 48,8 % | 36,1 % | 27,8 % | | the end of period, % | | | | | | ——————————————————————————– | Equity per share at the | 2,48 | 2,66 | 2,48 | 2,66 | 2,67 | | end of period, EUR * | | | | | | ——————————————————————————– | Investments in | 585 | 29 | 1 195 | 512 | 915 | | non-current assets | | | | | | ——————————————————————————– | Investments in fixed | 2,9 % | 0,2 % | 1,8 % | 1,0 % | 1,2 % | | assets, % of net sales | | | | | | ——————————————————————————– | Treasury shares held by | 90 056 | 36 583 | 90 056 | 36 583 | 69 022 | | the Group at the end of | | | | | | | period | | | | | | ——————————————————————————– | Treasury shares, % of | 1,4 % | 0,6 % | 1,4 % | 0,6 % | 1,0 % | | total share capital and | | | | | | | votes | | | | | | ——————————————————————————– | Number of total issued | 6607628 | 6607628 | 6607628 | 6607628 | 6607628 | | shares at the end of | | | | | | | period | | | | | | ——————————————————————————– | Personnel on average | 386 | 378 | 384 | 397 | 392 | | during the period | | | | | | ——————————————————————————– | Personnel at the end of | 391 | 383 | 391 | 383 | 372 | | period | | | | | | ——————————————————————————– * Equity attributable to the equity holders of the parent company / Number of shares excluding the acquired own shares ——————————————————————————– | QUARTERLY KEY | III | II | I | IV | III | II | I | | FIGURES | | | | | | | | ——————————————————————————– | EUR 1000 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | ——————————————————————————– | Net sales | 20 | 24 | 21 | 25 | 17 | 14 746 | 16 745 | | | 435 | 016 | 584 | 724 | 570 | | | ——————————————————————————– | EBITDA | 228 | 2 | 61 | 824 | 66 | 275 | 82 | ——————————————————————————– | Operating | -411 | -289 | -160 | 349 | -428 | 64 | -139 | | profit/loss | | | | | | | | ——————————————————————————– | Profit/Loss before | -327 | -200 | -43 | 300 | -488 | 45 | -217 | | taxes | | | | | | | | ——————————————————————————– | Net profit/loss | -557 | -134 | -240 | 165 | -581 | -55 | -311 | | for the period | | | | | | | | ——————————————————————————– | Earnings per | -0,09 | -0,02 | -0,04 | 0,02 | -0,09 | -0,01 | -0,05 | | share, EUR | | | | | | | | | (diluted = | | | | | | | | | non-diluted) | | | | | | | | ——————————————————————————– ——————————————————————————– | RELATED PARTY | III | III | I-III | I-III | I-IV | | TRANSACTIONS | | | | | | ——————————————————————————– | EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 | ——————————————————————————– | Sales to related parties | 16 | 1 | 48 | 13 | 17 | ——————————————————————————– | Purchases from related | 92 | 0 | 112 | 3 | 8 | | parties | | | | | | ——————————————————————————– | Loan receivables from | 558 | 571 | 558 | 571 | 562 | | related parties | | | | | | | (management of | | | | | | | subsidiaries) at the end | | | | | | | of period | | | | | | ——————————————————————————– ——————————————————————————– | COMMITMENTS | Sept 30 | Dec 31 | ——————————————————————————– | EUR 1000 | 2010 | 2009 | ——————————————————————————– | Mortgages and guarantees on own behalf | | | ——————————————————————————– | Business mortgage for the Group’s loan liabilities | 6 850 | 6 850 | ——————————————————————————– | Real estate pledge for the Group’s loan liabilities | 900 | 900 | ——————————————————————————– | Shares and other assets pledged as security for | 3 634 | 3 634 | | group companies’ liabilities | | | ——————————————————————————– | Pledges and guarantees given for the group | 227 | 226 | | companies’ | | | | off-balance sheet commitments | | | ——————————————————————————– | Guarantees given on behalf of third parties | 280 | 280 | ——————————————————————————– | Minimum future operating lease payments | 7 134 | 4 397 | ——————————————————————————– Accounting principles applied in the condensed consolidated financial statements These condensed consolidated financial statements are unaudited. This interim report has been prepared in accordance with IAS 34 following the valuation and accounting methods guided by IFRS principles. The accounting principles used in the preparation of this interim report are consistent with those adopted in the preparation of the Annual Report 2009 taking into account also the new, revised and amended standards and interpretations. Adoption of the amended standards IFRS 3 (Business Combinations) and IAS 27 (Consolidated and Separate Financial Statements) impacted the accounting of minority shares acquired during the financial period as well as the measurement of minority interests in loss-making subsidiaries. Adopting the amendments in IFRS 2 and IAS 39 as well as the new interpretations IFRIC 17 and IFRIC 18 did not have a material impact on the information presented in this interim report. The IFRS principles require the management to make estimates and assumptions when preparing financial statements. Although these estimates and assumptions are based on the management’s best knowledge of today, the final outcome may differ from the estimated values presented in the financial statements. In June 2010, the parent company reacquired shares (1 %) in Wulff Supplies from an employee leaving the group. In August, this one-percentage ownership was sold to Wulff Supplies’ new key employee. As these transactions were made based on the share of the equity, they did not impact the Group’s financial result. Closing of the small direct sales operations in Lithuania in summer 2010 did not have a material impact on the Group’s net sales, profitability or financial status. The TyEL pension premium loans withdrawn in summer 2009 have a bank guarantee which margin is linked to the covenants regarding the equity ratio and the interest-bearing debt/EBITDA ratio. The equity ratio shall be 35 % at minimum in the end of each year. In 2009, the interest-bearing debt/EBITDA ratio requirement of 5 was not reached but the violation was agreed with the bank with no consequences for the Group. Based on the result estimate, it is probable that the interest-bearing debt/EBITDA covenant (ratio 3,5) will be breached also as of December 31, 2010. The Group has negotiated with the bank in the autumn and in case of a probable covenant breach, the Group would be required to pay a one-off minor compensation to the bank which then will not have other requirements based on the current result estimate. The Group has no knowledge of any significant events after the end of the interim period that would have had a material impact on this interim report in any other way that has been already discussed in the interim review by the Board of Directors.

In Vantaa on November 9, 2010

WULFF GROUP PLC BOARD OF DIRECTORS

Further information:
CEO Heikki Vienola tel. +358 9 5259 0050 or mobile: +358 50 65 110
e-mail: heikki.vienola@wulff.fi

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