Talentum Q1 2006 Interim Report

STOCK EXCHANGE RELEASE

April 27, 2006 at 8.30 am

TALENTUM OYJ Malminkatu 30 FIN-00100 Helsinki Tel.+358(0) 20 442 40 Fax +358(0)20 4424 130 www.talentum.com 1(16)

SUCCESSFUL START TO YEAR FOR TALENTUM – INVESTMENT IN GROWTH TALENTUM JANUARY-MARCH 2006 (IFRS) January-March 2006 - Net sales: EUR 31.0 million (EUR 24.0 million) - Operating profit: EUR 2.3 million (EUR 1.9 million) - Cash flow from business operations: EUR 1.4 million (EUR 1.5 million) - Earnings per share: EUR 0.04 (EUR 0.03) - Equity ratio: 30.28% (34.86%) The consolidated net sales increased 29% in January-March compared with the previous year and totalled EUR 31.0 million (EUR 24.0 million). Talentum Sweden contributed EUR 5.2 million to the growth in net sales of EUR 7.0 million and, excluding the effect of the acquisition (October 6, 2005), net sales went up by 7.1%. The operating profit rose to EUR 2.3 million (EUR 1.9 million). Talentum Sweden accounts for EUR 0.2 million of the growth in the operating profit. Talentum published on April 25 its plan to launch a new high class magazine during autumn 2006, of which the costs EUR 0.4 million have accrued on the first quarter of the year (group items EUR 0.8 million (EUR 0.5 million)). IAS/IFRS REPORTING Talentum transferred to International Financial Reporting Standards (IFRS) on January 1, 2005. This interim report has been drawn up according to the IFRS recognition and valuation principles. In drawing up this interim report, Talentum has applied the same accounting principles as in the financial statements for 2005. The interim report is unaudited. CEO Harri Roschier: "The operating profit for each of Talentum’s business areas went up compared with the previous year. This was a good achievement, because at the same time we invested heavily in the growth and development of the business operations. Publishing went up 50% and Direct Marketing 25%. About 80% of Publishing’s growth came from the operations in Sweden. The integration of Talentum Sweden and setting the operations on a course of rapid growth and improved profitability have been highly successful, and personnel on both sides of the sea have cooperated enthusiastically. The enthusiasm has been well supported by the growth rate of 20% in the net sales in Sweden. Publishing’s operating profit was more than 10% of the net sales, which for the first quarter of the year is good. The sector-based organization that is aimed at speeding up growth in Publishing to which we transferred in autumn 2005 and the related investment have caused Publishing some additional expenditure in the early phases. The measures taken by TV Content Production during 2005 are starting to bring positive results, and better is expected of this year than last. The net sales of the TV Content Production group rose by a few per cent compared with the corresponding period in the previous year, and there was a considerable improvement in the operating profit, which was 5% of net sales. Premedia’s net sales exceeded last year’s and the operating profit was more than 5% of net sales. The measures taken by Premedia to improve profitability continued during the first part of the year.


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Direct Marketing increased by close on 25% and the operating profit remained at more than 15% of net sales. Operations are expanding gradually according to plan both in Finland and the Baltic region, and better is expected of this year than last in Direct Marketing too. " CONSOLIDATED NET SALES Consolidated net sales rose by 29% over the previous year and were EUR 31.0 million (EUR 24.0 million). Talentum Sweden (acquisition October 6, 2005) contributed EUR 5.2 million to the growth in net sales of EUR 7.0 million and, excluding the effect of the acquisition, net sales increased by 7.1%. Contributing to the strong improvement in the market in the first quarter compared with the previous year was the falling of Easter and the holidays either side of it in a different quarter – this year it was in April, whereas last year it was in March. The biggest contributions to the consolidated net sales were the growth in Publishing (52%) and Direct Marketing (24%). Publishing’s net sales went up by 8%, excluding the effect of the acquisition (October 6, 2005) of Talentum Sweden. In addition, the short-term growth targets for TV Content Production (1.8%) and Premedia (5.4%) were achieved. Publishing accounted for 60% (51%) of the consolidated net sales in the first quarter. TV Content Production accounted for 19% (24%) of the net sales, Premedia for 18% (22%) and Direct Marketing 7% (7%). Inter-group business activities accounted for 4% (4%) of the consolidated net sales. Advertising revenue from Talentum’s magazines was up 15%, the most significant factor being the more than 40% increase in job advertising. The trend in advertising sales is a key variable in Publishing’s financial performance. Magazines and online activities account for about 80% of Publishing’s net sales, of which advertising sales account for 65%, and network advertising contributes about 10% towards the entire advertising net sales. Books and training bring in the remaining 20% of Publishing’s net sales. Talentum has integrated its business operations portfolio with resolute development work and the implementation of synergy. Strong growth will still be sought for Publishing; investment in development has been increased. Talentum’s objective is to continue refining the business operations and synergy potential in a way that will support the company’s growth and create added value for the owners. CONSOLIDATED RESULTS Talentum’s consolidated operating profit for the first quarter totalled EUR 2.3 million (EUR 1.9 million), i.e. 7.3% (7.9%), and the profit was EUR 1.7 million (EUR 1.2 million), i.e. 5.5% (5.2%). Publishing and Direct Marketing performed very well, while Premedia together with TV Content Production were satisfactory. Fluctuations in exchange rates did not have a significant effect on Talentum’s consolidated net sales or the financial performance. Talentum Group’s currency risk comprises risks concerning foreign currency flows and risks involved with translating shareholders’ equity denominated in foreign currencies i.e. risks


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concerning the operations of Talentum Sweden. Most of the Group’s direct income and costs are generated in the euro zone. The earnings per share for the first three months of the year were EUR 0.04 (EUR 0.03). CASH FLOW, FINANCIAL POSITION AND BALANCE SHEET The cash flow of business operations in January-March totalled EUR 1.4 million (EUR 1.5 million). Net financial expenses in January-March were EUR –0.0 million (EUR –0.1 million), i.e. –0.1% of the net sales (-0.6%). The total assets on March 31, 2006 amounted to EUR 105.0 million (EUR 80.8 million), of which cash and cash equivalents totalled EUR 33.0 million (EUR 27.0 million). The dividend liability on the record date, March 31, 2006, increases the total assets by EUR 13.2 million and can be seen as increases in cash and cash equivalents and short-term debt in the balance sheet. The Group’s liquid assets are invested primarily in financial instruments and a small amount in shares. The change in cash and cash equivalents in January-March was EUR +10.3 million (EUR –1.5 million). The Talentum Group’s financial standing remained strong and the equity-to-asset ratio at the end of the period under review was 30.3% (34.9%). The comparability of the equity-to-asset ratio is weakened materially by the dividend of EUR 13.2 million on the record date of March 31, 2006 (EUR 0.30 per share). The Group’s equity per share was EUR 0.67 (EUR 0.43) at the end of March. The Group’s interest-bearing liabilities at the end of the period under review stood at EUR 29.0 million (EUR 20.1 million). DEPRECIATION, AMORTIZATION AND IMPAIRMENT Consolidated depreciation, amortization and impairment amounted to 3.0% of net sales (4.6%), i.e. EUR 0.9 million (EUR 1.1 million). INVESTMENT Gross investment in fixed assets in January-March totalled EUR 1.0 million (EUR 0.6 million), which is 3.2% (2.1%) of net sales. Gross investment comprised mainly normal replacement and maintenance investment, such as procuring equipment, software and fixtures. PERSONNEL The Group employed an average of 1,050 persons in January-March (1,177 persons). Of the employees, 28.3% (16.3%) worked abroad. The average number of staff, broken down by sector is as follows: Publishing 393 TV Content Production 95 Premedia 213 Direct Marketing 331 Group Administration 18


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MANAGEMENT During the first quarter changes took place in the Group management that arose mainly out of Talentum strengthening its organization as part of the sector-based organization for Publishing introduced as reported on August 26, 2005 and the internal job rotation that was implemented in connection with it. In addition to this, Pekka Hämäläinen, the Managing Director of Talentum subsidiary Talentum Premedia, resigned from his post on January 12, 2006. He was also a member of Talentum’s Executive Management Group. The managers of the Talentum Premedia units report to Director Seppo Summanen, who is responsible for the TV and Premedia sectors. Talentum’s CEO, Harri Roschier, CFO Kai Järvikare, Director of Legal Affairs Lasse Rosengren and Director Seppo Summanen are members of the Group’s Management Group. Caspar Berntzen, Director of Sales and Marketing, was appointed a new member of the Management Group as of April 1. Members of the Management Group are also members of the Talentum Executive Management Group. In addition the Executive Management Group also includes Petri Karjalainen, Business Unit Director; Jarl Michelsson, Director; Jarmo Rosenberg, Business Unit Director; Pekka Seppänen, Editor-in-Chief and Mikko Saarela, Managing Director. Mika Malin, Business Unit Director, Seppo Kyrö, Business Controller, and Managing Director Christer Björkin have all been appointed new members of the Executive Management Group. Jarl Michelsson, Director of Sales and Marketing of Talentum’s publishing operations, was appointed Director of Sales of Talentum Sweden AB and a member of the Management Group starting on April 1, 2006. STRUCTURAL CHANGES In the comparison figures for 2005, this interim report shows Satama Interactive’s figures under the heading discontinued operations in the income statement. Talentum sold for EUR 23.2 million its 60% majority holding in Satama Interactive, a company that engages in Internet consulting and was listed on the Helsinki Stock Exchange NM List in 2000. Satama Interactive’s net sales in accordance with IFRS came to EUR 23.6 million and the operating profit to EUR 0.6 million in 2004. Talentum recorded a profit on disposal of EUR 10.5 million in the third quarter of 2005. In the first quarter of 2006 Talentum Sweden accounted for EUR 5.2 million of the net sales and EUR 0.2 million of the operating profit, the corresponding figures for the final quarter of 2005 being EUR 5.8 million and EUR 0.9 million. On October 6, 2005 Talentum purchased the entire stock of the Swedish magazine publishing company Ekonomi & Teknik Förlag AB and on December 15, 2005 the company was renamed Talentum Sweden. The total purchase price was EUR 17.4 million (SEK 142 million), of which EUR 11.0 million (SEK 102 million) was in cash and EUR 6.4 million (SEK 60 million) in Talentum Oyj shares. Talentum Sweden had net sales of some EUR 18 million in 2005. The net sales of Talentum Sweden are expected to increase considerably in 2006 over the previous year and a profit is expected although investment in growth will put a considerable strain on the financial performance.


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BUSINESS OPERATIONS AND SEASONAL VARIATION IN THE MEDIA MARKET The general economic situation remained fairly good during the first three months of 2006. Contributing to the strong improvement in the market in the first quarter compared with the previous year was the falling of Easter and the holidays either side of it in a different quarter – this year it was in April, whereas last year it was in March. There is a seasonal fluctuation in the media and media services markets, and business is at its briskest during the final quarter of the year. Not all Talentum’s personnel resources are available during the summer holidays, and generally no magazines or books are put out in the summer. Customers typically make a significant proportion of their purchases in the final quarter. These characteristics of the business may cause considerable variation in Talentum’s quarterly net sales and particularly in the profit: the figures are the highest in the last quarter, and correspondingly, lower in the third quarter than in the first and second quarters. As a result of the seasonal fluctuation, the main part of net sales and an even greater part of the operating profit in publishing accrue in the latter half of the year. This is the most important reason for most of Talentum’s profit being made in the latter half of the year and the profit trend looking better towards the end of the year. The annual quarterly-based seasonal fluctuation in Publishing’s operating profit is increased from earlier periods by the seasonal fluctuation in Sweden being greater than in Finland because of the one-dimensional structure of the operations and the predominance of magazines. In order to eliminate the effects of seasonality Talentum presents the rolling 12-month income statements in addition to interim period financial statements. BUSINESS RISKS Talentum takes controlled risks that are integrally linked with its corporate strategy and objectives. Risks relating to strategy and objectives are controlled and reduced in various ways. 40% of the consolidated net sales are linked with advertising, specifically with the b-to-b sector, which is susceptible to cyclical fluctuation. We try to control this market risk by increasing revenue from circulation sales and content-sales services. All our products and services aim at being market leaders in their own field, which makes it possible to succeed even during a low cycle. The company is not prepared to take risks that endanger continuation of operations or are difficult to control and cause substantial harm to the company’s operations. Risk management does not have a separate organization of its own; its responsibilities follow the division of responsibilities in business operations and the organization. The most important perceived risks are reported to the Board of Directors annually when operations are being planned, and the Board then analyses risks from the shareholder value perspective. In addition, internal auditing is outsourced to Tuokko Tilintarkastus Oy (PKF International), a professional and independent external service provider with sufficient resources. The aim of internal auditing is to promote and improve risk management in Talentum’s various operating areas. Talentum keeps an active eye on the market situation in order to be able to prepare for changes in the competition situation in advance. Competition has remained unchanged for a longer period now, but it is possible that the major


April 27, 2006 at 8.30 am


media companies will increase their input in Talentum’s product areas significantly. The Talentum Group’s currency risks comprise risks concerning foreign currency flows and risks involved with translating shareholders’ equity denominated in foreign currencies i.e. risks concerning the operations of Talentum Sweden. The majority of the Group’s direct income and costs are generated in the euro zone. The basic principle for controlling risks concerning foreign currency flows is by matching income and costs. The basic principle for risks associated with translating shareholders’ equity is to try to hedge against large currency movements. Talentum tries to hedge against finance risks relating to its business operations by ensuring that stable financial conditions are created for developing. Customer’s payment behaviour is monitored constantly. Attempts are made to invest liquid funds in liquid money market instruments that have good credit standing. Liquid funds do not contain a major interest rate risk because of the short duration of the investments. BUSINESS AREAS Publishing Publishing accounted for 60% of the consolidated net sales. Publishing performed very well during the first quarter of the year. Net sales went up by 52% to EUR 18.6 million (EUR 12.2 million). Talentum Sweden contributed EUR 5.2 million to the growth in net sales of EUR 6.4 million and, excluding the effect of the acquisition (October 6, 2005), the net sales increased by 8%. Contributing to the strong improvement in the market in the first quarter compared with the previous year was the falling of Easter and the holidays either side of it in a different quarter – this year it was in April, whereas last year it was in March. The operating profit was EUR 2.1 million (EUR 2.0 million). Talentum Sweden accounts for EUR 0.2 million of the growth in the operating profit. The sector-based organization for Publishing, to which we transferred in August 2005, is aimed at speeding up growth, and the investment has brought some additional costs for Publishing in the early phases. Magazine publishing’s net sales totalled EUR 15.6 million (Internet services accounted for around EUR 0.9 million), book publishing’s net sales were EUR 2.5 million and the net sales for training activities were 0.5 million. The circulation revenue of Talentum’s magazines was up 11% and advertising revenue 15%. The most significant factor in the growth in advertising sales was the continued upturn in job advertising that started in the latter half of 2004. TV Content Production TV Content Production accounted for 19% of the consolidated net sales. The net sales of Varesvuo Partners Oy, which concentrates on TV content production, increased by 2% (2%) to EUR 5.9 million (EUR 5.8 million). The operating profit was EUR 0.3 million (EUR 0.1 million). The demand for commercials started an upturn after the fall of recent years with net sales increasing by 7% to EUR 2.3 million (EUR 2.1 million). TV Content


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Production continued investing in TV programme production. TV Content Production’s net sales went up by 3% to EUR 2.9 million (EUR 2.9 million). Premedia Premedia accounted for 17% of the consolidated net sales. Premedia’s net sales made a turnaround and increased by 5% (-11%), amounting to EUR 5.5 million (EUR 5.2 million). The operating profit was EUR 0.4 million (EUR 0.3 million). A considerable amount of the growth in Premedia’s net sales is explained by net sales for March, the biggest month in the first quarter in terms of net sales, rising by 16% over the previous year. The strong growth in March is explained by the falling of Easter and the holidays either side of it in a different quarter – this year it was in April, whereas last year it was in March. Direct Marketing Direct Marketing accounted for 4% of the consolidated net sales. Direct Marketing’s net sales increased by 24% (-15%) and totalled EUR 2.1 million (EUR 1.7 million). Direct Marketing’s strong improvement in the first quarter compared with the previous year is mainly explained by the improved performance of the operations. A significant part is also explained by the falling of Easter and the holidays either side of it in a different quarter – this year it was April, whereas last year it was in March. The increase of five working days in March compared with last year is significant because of the nature of the operations. The operating profit was EUR 0.3 million (EUR 0.3 million). Direct Marketing’s success in Finland and the Baltic countries went according to plan. ANNUAL GENERAL MEETING MARCH 28, 2006 Board of Directors and auditor Talentum’s Annual General Meeting on March 28, 2006 re-elected Manne Airaksinen and Juha Blomster as members of the Board of Directors; new members elected were Harri Kainulainen, Kai Mäkelä, Eero Lehti and Tuomo Saarinen. Tuomo Saarinen was elected Chairman of the Board and Manne Airaksinen Deputy Chairman. The Annual General Meeting on March 28, 2006 re-elected Authorized Public Accountants PricewaterhouseCoopers Oy with APA Kari Miettinen as the accountable auditor. Board of Directors’ authorizations The Annual General Meeting on March 28, 2006 authorized the Board of Directors to decide, within one year of the meeting, on taking out one or several convertible bonds and/or issuing options and/or on increasing the share capital by a rights issue in one or several instalments, provided that the increase is no more than EUR 1,859,351.88 and that no more than 4,422,081 new shares are subscribed. The maximum increase in the share capital and the combined number of votes of the shares issued correspond to less than 10% of the company’s registered share capital and of the combined number of votes conferred by the


April 27, 2006 at 8.30 am


shares. The Board of Directors has the right to decide on the subscription price, the grounds for determining the subscription price, other terms and conditions of the subscription, and the other terms and factors relating to the rights issue, issuing of options and taking out of a convertible loan. The authorization includes the right to overrule the shareholders' right of pre-emption. The authorization can be exercised only for financing mergers and acquisitions. As of March 31, 2006, the authorization had not been exercised. The Annual General Meeting on March 28, 2006 authorized the Board of Directors to decide, within one year of the meeting, on the acquisition of the company’s own shares using the company’s disposable funds in one or several instalments, but placed a limit of 4,422,081 on the maximum number of shares to be acquired, including the 181,000 shares acquired on the basis of previous acquisition authorizations. The limit is equivalent to less than 10% of the company’s registered share capital and combined votes conferred by the shares. The authorization includes the right to acquire shares in a manner other than in proportion to the shareholders’ holdings. As of March 31, 2006, the authorization had not been exercised. The Annual General Meeting on March 28, 2006 authorized the Board of Directors to decide, within one year of the meeting, on the relinquishment in one or several instalments of the company’s own shares acquired for the company, but placed a limit of 4,422,081 on the maximum number of shares to be relinquished. The limit is equivalent to less than 10% of the company’s registered share capital and combined votes conferred by the shares. The authorization includes the right to relinquish shares in a manner other than in the proportion to the shareholders’ pre-emptive rights to acquire the company’s own shares. As of March 31, 2006, the authorization had not been exercised. Dividend The Annual General Meeting on March 28, 2006 decided that a dividend of EUR 0.30 per share be paid for the 2005 financial year. The record date of payment of the dividend was March 31, 2006 and the date of payment April 7, 2006. SHARES AND SHARE CAPITAL At the end of the period under review Talentum Oyj’s share capital totalled EUR 18,593,518.79, comprising 44,220,817 fully paid-up shares. The book counter-value of each share was EUR 0.42 (not an exact value). The shares are listed on the Helsinki Stock Exchange Main List. At the and of the period under review the company and its subsidiaries held 181,000 company shares, 0.41% of Talentum’s total stock and votes. Shareholdings of the Board of Directors and Managing Director On March 31, 2006, the number of Talentum Oyj shares and options owned by members of the Board of Directors and the CEO personally and through companies in which they have a controlling interest was 4,590,938, representing 10.4% of the company's total shares and votes. Notifications On January 4, 2006 Nordea Bank AB reported that its subsidiary, Nordea Bank Plc, had acquired 600,000 Talentum shares on January 3, 2006, as a result of which the Nordea Group’s share of Talentum’s ownership and votes exceeded 1/20. At the same time, Nordea Bank AB reported that, as a result of derivative deals made on


April 27, 2006 at 8.30 am


January 3, 2006, the Nordea Group’s and Nordea Bank Finland Plc’s share of Talentum’s ownership and shares would fall below 1/20 when the forwards matured on March 17, 2006. On January 4, 2006 Oy Herttakuutonen Ab reported that its share of Talentum’s ownership and votes would reach 1/10 through a forward trade made on January 4, 2006 and maturing on March 17, 2006. On February 13, 2006 Franklin Resources Inc. informed Talentum Oyj that the holding by Franklin Mutual Advisers, LLC had exceeded the 5% proportion of the ownership and voting rights and was 5.57%. On March 10, 2006 Oy Herttakuutonen Ab informed Talentum Oyj that its proportion of votes and share capital in Talentum Oyj (10.04%) had reached one tenth (1/10) on trades that settled the forward trades of Oy Herttakuutonen Ab maturing on March 17, 2006, announced by a stock exchange release on January 4 2006, resulting in the purchase of the linked shares. The Swedish Nordea Bank AB (publ.) informed Talentum Oyj on March 13, 2006 that on March 10, 2006 its Finnish subsidiary Nordea Bank Finland Plc had sold 1,692,700 Talentum Oyj shares, due to which its proportion of Talentum's share capital and voting rights as of March 10, 2006 was 0.00%. The Finnish subsidiary Nordea Life Assurance Finland Ltd of the Nordea Bank AB (publ.) Group, owned in addition 1,049,050 Talentum Oyj shares, corresponding to 2.37% of the share capital and voting rights. The holding of Nordea Bank AB (publ.) and its subsidiaries in Talentum Oyj's share capital and voting rights was consequently 2.37%, and had thus fallen below one-twentieth (1/20). Liquidity providing agreement An agreement with Nordea Securities Plc on liquidity providing for Talentum Oyj shares became effective on June 21, 2004. Under the agreement, Nordea Securities submits a purchase and sale offer so that the maximum differential between them is 3% of the purchase offer. The offers will include a minimum of 2,500 shares. IMPORTANT EVENTS AFTER THE PERIOD UNDER REVIEW On April 19, 2006 Talentum announced that it was expanding its publishing business by acquiring 30% of Acacom Academic Communications Oy. Acacom publishes the Improbatur magazine for high school-students, the magazine Campus.fi for university students in the technical and business fields as well as 25 different customer magazines. Talentum plans to acquire the majority of the company in the future. Acacom’s net sales grew rapidly in 2005 and were approximately EUR 3.5 million, and the company is very profitable. The acquisition is not expected to have a material effect on Talentum Oyj’s financial performance for 2006. OUTLOOK Talentum’s media achieved good success in the first months of 2006 compared with its competitors. The economies of both Finland and Sweden are still performing well and this generally means that advertising and marketing will also make good progress and the media will be successful. Talentum feels that, on the basis of the market situation as seen at present, the position will remain the same right through to the end of 2006. - The forecasts and estimates presented here are based on the management’s current view of economic trends. The actual results may differ considerably from those expected at this time.


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This interim report has been drawn up according to the IFRS recognition and valuation principles. In drawing up this interim report Talentum has applied the same accounting principles as in the financial statements for 2005. This interim report is unaudited. INCOME STATEMENT 1-3/2006 1-3/2005 1-12/2005 1000 EUR Net sales 30 925 23 966 103 289 Operating profit (adjusted) *) 2 256 1 895 20 447 Financial income and expenses -46 -139 -741 Share of profit of associates 54 9 239 Adjusted profit before tax *) 2 264 1 764 19 945 Operating profit on discontinued operations

0 280 -11 231

Profit before tax 2 264 2 044 8 715 Income tax expense -550 -524 -1 556 Profit after tax - ongoing activities

1 713 1 520 7 158

Discontinued operations 0 -274 11 500 Profit for the period 1 713 1 246 18 658

Attributable to: Equity holders of the parent 1 533 1 276 17 868 Minority interest 181 -29 789

Earnings per share (EUR) 0.04 0.03 0.42 Earnings per share, ongoing operations (EUR)

0.04 0.03 0.16

Earnings per share, discontinued operations (EUR)

0.00 0.00 0.26

*)Including discontinued operations Tax presented corresponding to the result of the period


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BALANCE SHEET 31.3.2006 31.3.2005 31.12.2005

1000 EUR ASSETS Non-current assets Intangible assets 12 001 2 570 12 135 Goodwill 24 943 12 072 24 792 Tangible assets 7 514 9 052 7 754 Investments in associates 1 255 1 211 1 389 Deferred income taxes 3 517 5 712 3 458 Other long term receivables and investments

1 430 983 1 375

Total non-current assets 50 659 31 600 50 903

Current assets Inventories 3 099 2 014 3 469 Trade receivables and other receivables **)

18 275 20 211 13 407

Cash and cash equivalents 32 956 26 961 22 677 Total current assets 54 330 49 186 39 553

TOTAL ASSETS 104 989 80 786 90 456

SHAREHOLDERS' EQUITY AND LIABILITIES

Shareholders' equity Share capital 18 594 17 892 18 594 Share premium reserve 5 896 167 5 896 Own shares -1 314 -1 348 -1 314 Fair value reserve and other reserves

4 15 4

Exchange differences -124 84 -44 Retained earnings 4 759 183 254 Net income 1 533 1 276 17 868 Total 29 348 18 268 41 259 Minority interest 2 014 9 779 2 043 Total equity 31 362 28 047 43 302

Long term debt 8 733 9 520 8 522 Short term debt 64 893 43 219 38 632

SHAREHOLDERS' EQUITY AND LIABILITIES

104 989 80 786 90 456

Interest bearing debt 29 043 20 053 15 555


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CASH FLOW STATEMENT 1-3/2006 1-3/2005 1-12/2005 (1000 EUR) Profit for the period 1 713 1 246 18 658 Adjustments 1 499 1 551 -5 309

Change in working capital -1 476 -940 -3 392 Net financial items and taxes -335 -388 -1 727 Net cash from operating activities

1 402 1 469 8 230

Acquisitions of subsidiaries and associates

-2 370 -324 -11 903

Purchase of other non-current assets

-803 -628 -3 225

Other investments -1 105 -1 455 -1 772 Sales of subsidiaries 17 770 Sales of other non-current assets 52 48 461 Net cash used in investing activities

-4 226 -2 359 1 331

Issue of share capital 0 0 0 Change in short term loans 14 000 0 -2 000 Change in long term loans -590 -474 -4 710 Payment of finance lease liabilities

-46 -39 -174

Dividends paid and equivalents -96 -122 -6 620 Other financing items -163 69 -74 Share repurchases -1 724 Net cash used in financing activities

13 105 -566 -15 302

Net change in cash and cash equivalents

10 280 -1 456 -5 741

Cash and cash equivalents at beginning of period

22 677 28 418 28 418

Cash and cash equivalents at end of period

32 956 26 961 22 677

Including discontinued operations:

Cash flow from operating activities

-286 628

Cash flow from investing activities

-1 580 15 289

Cash flow from financing activities

189 -1 400

INVESTMENTS 1-3/2006 1-3/2005 1-12/2005 (1000 EUR) Investments in non-current assets, ongoing activities

1 000 495 25 672

Investments in non-current assets, discontinued activities

0 120 2 876

Total 1 000 615 28 548 % of net sales 3.2 2.1 23.3


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AVERAGE NUMBER OF EMPLOYEES Talentum Group ***) 767 932 923 Part-time telemarketing staff 283 245 279 Total 1 050 1 177 1 202

***) Including employees of discontinued operations

288 222

CONTINGENT LIABILITIES 31.3.2006 31.3.2005 31.12.2005

(1 000 EUR)

Given as security 5 903 17 220 5 903 loans with securities as collateral

3 628 4 365 3 801

Rental and other commitments ****)

17 532 22 092 18 845

Leasing commitments ****) 2 518 3 343 2 492 ****) Including the commitments of discontinued operations

4 488

NUMBER OF SHARES Adjusted average number 42720075 42354126 42720075 Number at the end of period 44039817 42370176 44039817

KEY FIGURES Earnings per share, adjusted (EUR)

0.04 0.03 0.42

Earnings per share, ongoing activities (EUR)

0.04 0.03 0.16

Earnings per share, discontinued operations (EUR)

0.00 0.00 0.26

Equity per share (EUR) 0.67 0.43 0.94 Equity ratio, % 30.28 34.86 48.84


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STATEMENT OF CHANGES IN EQUITY (EUR 1000) Equity Share

premium reserve

Fair value reserve and other reserves

Exchange differen

ces

Retained earnings

Minority interest

Total equity

Equity 1.1.2005

17863 -4 7 84 5028 9875 32852

Exchange differences

87 16 103

Share-based payments

54 36 90

Net income recognized directly in equity

8 22 2 32

Profit for the period

1276 -29 1247

Dividends paid

-6356 -121 -6477

Issue of share capital

29 29

Share Premium

171 171

Equity 31.3.2005

17892 167 15 84 111 9779 28047

Equity 1.1.2006

18594 5896 4 -44 16808 2043 43302

Exchange differences

-80 0 -80

Net income recognized directly in equity

-153 -153

Profit for the period

1 533 181 1713

Dividends paid

-13212 -129 -13 341

Other -81 -81

Equity 31.3.2006

18594 5896 4 -124 4978 2014 31362


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TALENTUM GROUP / SUB-SEGMENTS (1000 EUR) 1-3/2006 1-3/2005 1-12/2005 Rolling 12

months 4/05-03/06

Rolling 12 months

4/04-03/05 Net sales Publishing 18 604 12 224 57 447 63 827 49 830 TV content production

5 941 5 837 21 499 21 603 23 292

Premedia 5 471 5 190 20 975 21 256 20 593 Direct marketing 2 079 1 672 7 163 7 570 6 594 Internet consulting ****)

0 5 809 19 717 13 908 23 287

Sales within group -1 170 -1 002 -4 027 -4 195 -3 756 Total 30 925 29 730 122 774 123 968 119 840 -Discontinued operations

0 -5 809 -19 717 -13 908 -23 287

Adjustments and eliminations

0 45 232 187 112

Total / ongoing activities

30 925 23 966 103 289 110 247 96 665

Operating profit Publishing 2 054 2 006 9 823 9 872 8 527 TV content production

296 104 628 820 65

Premedia 358 260 31 128 975 Direct marketing 330 278 1 157 1 209 979 Internet consulting ****)

0 -280 743 1 022 361

Parent company and group items

-782 -474 -2 422 -2 731 -1 744

Capital gain on discontinued operations

0 10 488 10 488 0

Total 2 256 1 895 20 447 20 808 9 162


April 27, 2006 at 8.30 am


PUBLISHING BY GEOGRAPHICAL AREA (1000 EUR) 1-3/2006 1-3/2005 1-12/2005 Net sales Finland 13 274 12 133 51 241 Other 5 330 91 6 206 Total 18 604 12 224 57 447

Operating profit Finland 1 871 2 015 8 888 Other 183 -9 935 Total 2 054 2 006 9 823

Average number of employees Publishing 393 276 308 TV content production 95 114 102 Premedia 213 190 228 Direct marketing 331 292 326 Internet consulting ****) 0 288 222 Group administration 18 17 16 Total 1 050 1 177 1 202

*****) Discontinued operations, gross (including group eliminations)

Talentum will publish an interim report for January-June on July 21, 2006 and for January-September on October 27, 2006. TALENTUM OYJ Harri Roschier CEO FURTHER INFORMATION Harri Roschier, CEO, tel +358 (0)20 442 4220 Kai Järvikare, CFO, tel +358 (0)40 342 4210 www.talentum.com COPIES TO Helsinki Stock Exchange Key media BRIEFING A briefing will be held for analysts and the media today, April 27, 2006, at 10 a.m. at the Radisson SAS Royal Hotel, Runeberginkatu 2, Helsinki. The interim report will be presented by CEO Harri Roschier, and CFO Kai Järvikare will also be present.

Documents

Talentum Q1 2006 Interim Report