Timo Lepistö, CEO:

"The improvement in Edita’s profit performance shows that the structural change made in our business has been fruitful and that we have been able to adjust our operations to the challenging market conditions in the first half of 2009. Although net revenue has fallen by as much as a fifth in some areas, Edita’s profitability has remained quite good.”

Group structure

Since the start of the year, the Edita Group has had four business areas: Marketing Services, Editorial Communication, Publishing, and Print & Distribution. No other changes have taken place in Group structure.
 
Net revenue and profit

The net revenue of the Group’s continuing operations was EUR 57.4 million (EUR 52.5 million), of which EUR 33.7 million (EUR 40.8 million) was accumulated in Finland and EUR 23.9 million (EUR 14.6 million) in Sweden. Consolidated operating profit was EUR 2.4 million (EUR 2.2 million). The figures for discontinued operations in January-June 2008 (EUR -0.7 million) included the costs of shutting down the AP-Paino Oy plant in spring 2008.

The net revenue of the Marketing Services business area was EUR 8.3 million (EUR 2.6 million) and operating profit EUR -0.2 million (EUR -0.2 million). Net revenue grew with the acquisition of Citat Group AB, but the overall growth in net revenue was less than expected. This was because of the steep decline of the media market, especially in Sweden. Due to the low net revenue and the cost of these measures, a loss was recorded in Sweden. In Finland, net revenue was on a par with 2008, and operating profit showed an improvement.

The net revenue of the Editorial Communication business area was EUR 7.8 million (EUR 0.7 million), and operating profit was EUR 0.4 million (EUR 0.0 million). The acquisition of Citat Group AB boosted net revenue and operating profit. In Finland, net revenue fell and the operating loss grew in comparison with the previous year’s figure.

The net revenue of the Print & Distribution business area was EUR 36.2 million (EUR 43.4 million) and operating profit EUR 1.7 million (EUR 2.1 million). Net revenue decreased both in Finland and Sweden as a result of deterioration in the economy and tighter market conditions. Operating profit was also down in both countries. Operating profit decreased due to the cost of the adjustment measures.

The net revenue of the Publishing business area was EUR 8.2 million (EUR 9.0 million) and operating profit EUR 1.5 million (EUR 1.2 million). The decline in net revenue was due mostly to the contraction in the textbook and non-fiction markets and tighter market conditions.

Solvency and financial position

The equity-to-assets ratio was 33% (35%). The balance sheet total was EUR 91.9 million (EUR 84.7 million). The improved balance sheet total was due to the acquisition of Citat Group AB in July 2008. Interest-bearing debt was EUR 34.5 million (EUR 22.5 million). Cash and cash equivalents were EUR 9.8 million (EUR 24.6 million) at the end of the period. The figure was reduced by the acquisition of Citat Group AB, which also increased the amount of interest-bearing debt.

Capital expenditure

The Group’s gross capital expenditure in the period was EUR 2.0 million (EUR 8.3 million). The expenditure was mainly replacement investments, the principle replacements being printing presses for Edita Prima Oy and Edita Västra Aros AB.

Risks and risk management

The Group’s risks are assessed by conducting a regular risk survey. The principal risks concern economic downturn, exchange rates and accumulation of trade receivables.

To prepare for the weakening of general economic conditions and for tougher competition in the printing industry, Edita already took measures to adjust its Finnish operations during the fall of 2008. The adjustment measures were continued in Finland and were also implemented in Sweden in the first half-year of 2009. A significant deterioration in market conditions and a faster-than-expected increase in raw material prices and other costs may weaken the Group’s profitability in 2009.

The Group’s foreign exchange risk grew due to the acquisitions in Sweden. Hedging was used in preparation for weakening exchange rates. The decline in market interest rates was taken into consideration in the review of finance risks. Edita hedged some of its interest-bearing debt.

Special attention was paid to the management of credit loss risks. Collection of outstanding debts as well as monitoring the solvency and creditworthiness of customers were enhanched.

Board of Directors

Carina Brorman and Eva Persson were elected as new members of the Edita Plc Board of Directors at the Annual General Meeting of April 29, 2009. Lauri Ratia (chairman), Jarmo Väisänen (vice chairman), Liisa Jauri, Riitta Laitasalo and Timo Löyttyniemi continue as board members.

Staff

The Group employed an average of 920 persons (823) during the review period, and 899 (811) at the end of the period. The average number of personnel in continuing operations was 920 (760). The parent company employed an average of 36 persons (33), and 37 (34) persons at the end of the period.

The acquisition of Citat Group AB in July 2008 increased the average personnel by 274 persons in the Marketing Services and Editorial Communication business areas. In the other business areas, personnel numbers declined as a result of the adjustment measures that were taken.

Outlook for the remainder of 2009

Edita’s profit performance is affected significantly by the demand for communications services in Finland and Sweden. In comparison with the first six months, we don’t expect the business conditions to improve during the second half of 2009. Edita is ready to react quickly to changes in the market in the second half of 2009 as well.

This interim report has not been audited

Edita Plc

Timo Lepistö
CEO

ATTACHMENT: Financial statements and Notes to the financial statements

Additional information: Timo Lepistö, CEO,

tel. +358 40 860 2355,

e-mail: timo.lepisto@edita.fi, www.edita.fi

Distribution: State’s Ownership Steering Department, media.