Talentum Q1 2005 Interim Report

STOCK EXCHANGE RELEASE April 27, 2005 at 8.30 pm

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TALENTUM’S INTERIM REPORT JANUARY-MARCH 2005 IN ACCORDANCE WITH IFRS STANDARDS -

Net sales: EUR 29.7 million (EUR 29.8 million) Operating profit: EUR 1.9 million (EUR 2.4 million) Cash flow from business operations: EUR 1.5 million (EUR 1.2 million) Earnings per share: EUR 0.03 (EUR 0.04) Equity ratio: 34.9% (39.3%)

Talentum’s consolidated net sales remained unchanged compared with the previous year, totalling EUR 29.7 million (EUR 29.8 million), with sales for the latter part of March being well below those twelve months earlier. The operating profit fell from the previous year to EUR 1.9 million (EUR 2.4 million). The most significant positive factor in the Group’s profitability was Publishing’s obvious improvement. However, the profitability of TV Commercial Production, Premedia, Internet Consulting and Direct Marketing failed to reach the targets.

Managing Director Harri Roschier: "Of Talentum’s business areas, Publishing did extremely well in the first quarter of the year. The net sales went up by 8% and the operating profit improved by 40% and was 16% of the net sales in spite of a quiet March.

Contributing to the flat market development in March compared with the previous year was the falling of Easter and the attendant holidays either side of it in a different quarter – this time in March whereas a year ago it was in April.

One particular cause of pleasure was the success of the magazines Tietoviikko and Talouselämä, whatever standard they were judged by.

Overall the spring looks like being good for Talentum’s Publishing. The net sales continues to grow and with more efficient operations the operating profit will improve from last year’s good level.

The net sales of Talentum’s other operations failed to meet the targets in the first quarter, and the operating profit levels did not come up to those of the previous year. The second quarter of the year, however, will bring a real improvement to the situation compared to the previous year.

The net sales of the TV Content Production group rose by a few per cent compared with the corresponding period last year, but in terms of the financial performance the period under review was a disappointment.

Talentum strengthened its market position in Premedia’s field by acquiring Faktor Oy, a move that led to the company achieving market leadership in magazine prepress production. Premedia’s operating profit fell short of last year’s figure and was 5% of the net sales. Premedia will, however, improve its operating profit for January-June period compared with last year.

Direct Marketing is performing well and operations are expanding gradually in the Baltic region. The net sales fell, but it is expected to start an upturn during the present year.

Satama Interactive’s net sales and financial performance did not materialize as planned for January–March. Expectations are that the net sales in the second quarter will be higher than in the first and a good profit will be made."

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IAS/IFRS REPORTING Talentum transferred to IFRS (International Financial Reporting Standards) reporting from 1 January 2005. IFRS figures for 2004, which were published on 25 April 2005, have been used for comparison purposes. The interim report is unaudited.

CONSOLIDATED NET SALES Talentum’s consolidated net sales remained unchanged compared with the previous year, totalling EUR 29.7 million (EUR 29.8 million) even though the working-dayadjusted net sales was higher than one year earlier.

The biggest positive effect on the consolidated net sales was the growth by Publishing (8.3%) and TV Content Production (2.2%). On the other hand, growth by Premedia (-10.6%), Direct Marketing (-14.8%) and Internet Consulting (-5.1%) failed to reach the target.

Publishing accounted for 41% (39%) of the consolidated net sales in the first quarter of the year. TV Content Production accounted for 19% (19%) of the net sales, Premedia 17% (19%), Direct Marketing 6% (6%) and Internet Consulting 20% (20%). Inter-group business activities accounted for 3% (3%) of the net sales.

Advertising revenues from Talentum’s magazines rose by 10%, the most significant factor being the more than 30% growth in job advertising. The trend in the sale of advertising is a crucial variable for Publishing’s financial performance. The magazines and on-line activities bring in about 75% of Publishing’s net sales.

Sales of advertising account for 60% of this. Books and training bring in the remaining 25% of Publishing’s net sales.

Cooperation between different media within the Group on the one hand and between content production units and the sales organization on the other is being exploited to gain a competitive edge, in line with the Group's business strategy. The percentage of internal sales was highest in Direct Marketing at 40% and in Premedia at 4%.

CONSOLIDATED RESULTS Talentum’s consolidated operating profit for the three months was EUR 1.9 million (EUR 2.4 million) i.e. 6.4% (8.2%) The profit for the period was EUR 1.3 million (EUR 1.8 million) i.e. 4.3% (6.0%).

Publishing performed well, Direct Marketing satisfactorily, and Premedia, TV Content Production and Internet Consulting unsatisfactorily.

Fluctuations in exchange rates did not have a direct bearing on Talentum’s consolidated net sales or on the financial performance. The earnings/share were EUR 0.03 (EUR 0.04) for the first three months of the year.

CASH FLOW, FINANCIAL POSITION AND BALANCE SHEET The cash flow of the business operations for January-March was EUR 1.5 million (EUR 1.2 million).

Net financial income totalled EUR -0.1 million (EUR +0.0 million) in JanuaryMarch, i.e. -0.4% of the net sales (0.2%).

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The final balance sheet total on 31 March, 2005 was EUR 80.8 million (EUR 85.1 million), of which cash assets totalled EUR 27.0 million (EUR 32.2 million). The Group’s liquid assets are invested mainly in financial instruments and a small amount in shares. The change in cash assets in January - March was EUR –1.5 million (EUR -2.8 million).

Talentum Group's financial standing was good, and the equity ratio at the end of the period under review was 34.9% (39.3%). The equity per share at the end of March was EUR 0.43 (EUR 0.50).

The Group’s interest-bearing liabilities at the end of the period under review amounted to EUR 20.1 million (EUR 18.9 million).

DEPRECIATION, AMORTIZATION AND WRITE-DOWNS Consolidated depreciation, amortization and write-downs at the end of the period under review amounted to 3.7% of the net sales (4.4%), which is EUR 1.1 million (EUR 1.3 million) INVESTMENT Gross investment in fixed assets totalled EUR 0.6 million (EUR 1.4 million) in January-March, which is 2.1% (4.6%) of the net sales. The amount mainly comprised normal replacement and maintenance investment such as purchases of equipment, software and fixtures.

PERSONNEL The Group employed an average of 1,177 people (1,169 people) in January-March.

Of the personnel, 16.3% (15.6%) were employed abroad.

Broken down by business area the number of personnel is as follows: Publishing TV Content Production Premedia Direct Marketing Internet Consulting Group Administration

276 114 190 292 288 17

MANAGEMENT No changes took place in the Group management during the first quarter.

Subsequent to it Jukka Valtanen, the Managing Director of Varesvuo Partners Oy, a subsidiary of Talentum Oyj, resigned in order to take up a position at Elisa Corporation. He was a member of the Talentum Group’s Management Group and Executive Management Group. Similarly, Jukka Näntö, the Managing Director of Suoramarkkinointi Mega Oy, which is part of the Talentum Group, resigned from the company. He was a member of the Group’s Management Group.

BUSINESS AREAS Publishing Publishing accounted for 41% of the consolidated net sales.

Publishing performed well in the first quarter of the year. Its net sales went up by 8% to EUR 12.2 million (EUR 11.3 million). The operating profit was EUR 2.0 million (EUR 1.4 million).

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Magazine publishing’s net sales was EUR 9.6 million (Internet Services accounted for about EUR 0.9 million), book publishing’s was EUR 2.3 million and training activities’ was EUR 0.4 million.

The profitability of magazine publishing in particular showed a marked improvement. Circulation revenues from Talentum’s magazines went up by 1% and advertising revenues by 10%. The most significant factor in the growth of advertising sales was the continued revival in job advertising, which began in the second 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 focuses on TV content production, increased by 2.2% and was EUR 5.8 million (EUR 5.7 million). The operating profit was EUR 0.1 million (EUR 0.2 million).

TV Content Production continued to focus on TV programme production as demand for advertising film production remained at a low level.

Premedia Premedia accounted for 17% of the consolidated net sales.

The net sales of the Premedia business sector fell by 10.6%, totalling EUR 5.2 million (EUR 5.8 million). The operating profit was EUR 0.3 million (EUR 0.5 million).

The big fall in Premedia’s net sales is explained to a considerable extent by a drop of 16% as against the previous year in the net sales for March, the best month in terms of net sales in the first quarter.

Direct Marketing Direct Marketing accounted for 4% of the consolidated net sales.

The net sales of Direct Marketing fell by 14.8% to EUR 1.7 million (EUR 2.0 million). The operating profit was EUR 0.3 million (EUR 0.4 million).

In Finland Direct Marketing’s falling net sales was reflected in profitability.

In the Baltic region Direct Marketing performed as expected.

Internet Consulting Internet Consulting accounted for 19% of the consolidated net sales.

The net sales of Internet Consulting was EUR 5.8 million (EUR 6.1 million), which is 5.1 % smaller than the year before. The operating profit was EUR -0.3 million (0.4 million).

Satama Interactive Oyj will publish its own separate report on its operations.

ANNUAL GENERAL MEETING ON MARCH 29, 2005 Board of Directors and auditors The Annual General Meeting on March 29, 2005 elected the following to continue as members of the Board of Directors: Manne Airaksinen (Chief Policy Advisor), Juha Blomster (Managing Director), Ari Heiniö(Master of Laws), Jussi Länsiö (B.Sc Econ.) and Kirsti Piponius (Deputy Chairman of the Board). Jussi Länsiö was elected Chairman of the Board of Directors and Manne Airaksinen Deputy Chairman.

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The meeting also re-elected PriceWaterhouseCoopers Oy, Authorized Public Accountants (APA) to be the auditors, with Kari Miettinen, APA, as responsible auditor.

Board of Directors’ authorizations The Annual General Meeting on March 29, 2005 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 to decide on increasing the share capital by a rights issue in one or several instalments so that the increase may be no more than EUR 893,149 and no more than 2,124,169 new shares may be subscribed. The maximum amount of an increase in the share capital and the combined number of votes of the shares issued correspond to less than 5% of the company’s registered share capital and the combined number of votes in the 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 price, 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 preemption. The authorisation may only be used to financing corporate transactions. As of March 31, 2005 the authorization had not been exercised.

The Annual General Meeting on March 29, 2005 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 so that the maximum number of shares to be acquired, including the 181,000 shares acquired on the basis of previous acquisition authorizations, is 2,124,169, a number that is equivalent to less than 5% of the company’s registered share capital and combined votes in the shares. The authorization includes the right to acquire shares otherwise than in proportion to the shareholders’ holdings. As of March 31, 2005 the authorization had not been exercised.

The Annual General Meeting on March 29, 2005 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 so that the maximum number of shares to be relinquished is 2,124,169, a number that is equivalent to less than 5% of the company’s registered share capital and combined votes in the shares. The authorization includes the right to relinquish shares otherwise than in the proportion in which shareholders have the preemptive rights to acquire the company’s own shares. As of March 31, 2005 the authorization had not been exercised.

Dividend The Annual General Meeting on March 29, 2005 decided to pay a dividend of EUR 0.15 per share for the 2004 financial year. The record date was April 1, 2005 and the payment date of the dividend was April 8, 2005.

SHARES AND SHARE CAPITAL The entire share capital of Talentum Oyj at the end of the period under review comprised 42,551,176 shares and amounted to EUR 17,891,485.15. On March 31, 2005 Talentum Oyj and its subsidiaries held 181,000 company shares, or the equivalent of 0.4 of Talentum’s share capital and votes.

Shareholdings of the Board of Directors and the Managing Director On March 31, 2005, the number of Talentum Oyj shares and options owned by members of the Board of Directors and the Managing Director personally and through companies in which they have a controlling interest was 120,776, representing 0.3% of the company's total shares and votes.

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Targeted issue for former owners of Suomen Arvopaperimediat Oy Talentum Oyj acquired the entire shareholding of Suomen Arvopaperimediat Oy, the publisher of the magazine Arvopaperi, pursuant to a Share Exchange Agreement signed on July 9, 2004. In accordance with the Share Exchange Agreement Talentum Oyj agreed to pay the shareholders of Suomen Arvopaperimediat Oy an additional purchase price provided that the conditions for the additional purchase price set in the Share Exchange Agreement are met. Talentum Oyj and the former owners of Suomen Arvopaperimediat Oy agreed on March 17, 2005, that the additional purchase price set in the Share Exchange Agreement will be paid, in deviation from the terms of the Share Exchange Agreement, in one instalment, after which the purchase price will have been fully paid. In order to pay the additional purchase price the Board of Directors of Talentum Oyj decided, on the basis of the authorization given by the Annual General Meeting of Talentum Oyj on March 24, 2004, to increase the share capital through a targeted rights issue of shares. In the targeted rights issue the share capital of the company may be increased by a maximum of EUR 28,506.17 by offering for subscription a maximum of 67,796 new shares in the company to the former owners of Suomen Arvopaperimediat Oy. The subscription price was EUR 2.95/share. In the issue targeted at the former owners of Suomen Arvopaperimediat Oy 67,796 Talentum shares were subscribed. The increase of EUR 28,506.17 in the share capital was entered in the Trade Register on March 23, 2005.

Notification The Association of Finnish Lawyers notified Talentum Oyj that on January 18, 2005 its shareholding fell below the five per cent ownership and voting-right limit and was 4.938%.

IMPORTANT EVENTS AFTER THE PERIOD UNDER REVIEW Talentum Premedia Oy acquired on April 4, 2005 the entire share capital of Faktor Oy and Faktor Tools Oy, which operate in the same sector. They are now fully owned subsidiaries of Talentum Premedia.

OUTLOOK Talentum repeats its previous forecasts both for January-June and for the whole of 2005.

The second quarter of the year will be much better than last year and the net sales and operating profit for January-June are expected to be higher than the equivalent figures for last year.

Talentum’s consolidated net sales will increase and the operating profit will improve in 2005.

TALENTUM OYJ Malminkatu 30 FIN-00100 Helsinki Tel.+358(0) 20 442 40 Fax +358(0)20 4424 130 www.talentum.com 7(10)

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INCOME STATEMENT 1 000 EUR Net sales Other operating income Operating expenses Depreciation, amortization and impairment Operating profit Financial income and expenses Share of profit of associates Profit before taxes Income tax expense Profit for the period Attributable to: Equity holders of the parent Minority interest

1-3/2005

1-3/2004

1-12/2004

29 730 120 -26 854 -1 101

29 813 242 -26 316 -1 303

119 923 667 -106 239 -5 054

1 895 -133 9 1 770 -524 1 246

2 435 46 93 2 575 -489 2 085

9 298 -72 308 9 534 -2 564 6 969

1 276 -29

1 798 288

6 280 690

0.03

0.04

0.15

31.3.2005

31.3.2004

31.12.2004

Earnings per share (EUR) BALANCE SHEET 1000 EUR ASSETS Non-current assets Intangible assets Goodwill Tangible assets Investments in associates Deferred income taxes Other long term receivables Total non-current assets

2 12 9 1 5

570 072 052 211 712 983 31 600

3 7 10 1 5

047 625 402 274 983 667 28 998

2 12 9 1 5 1 32

2 014 20 211

1 654 22 237

1 878 15 314

26 961 49 186

32 171 56 062

28 418 45 610

TOTAL ASSETS

80 786

85 060

78 464

SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity Share capital Share premium reserve Fair value reserve and other reserves Exchange differencies Retained earnings Net income Total Minority interest Total equity

17 892 167 15 84 -1 165 1 276 18 268 9 779 28 047

8 763 391 7 183 86 2 631 1 798 20 852 12 512 33 364

17 863 -4 7 84 -1 252 6 280 22 977 9 875 32 852

Long term debt Short term debt

9 520 43 219

18 268 33 428

10 552 35 060

SHAREHOLDERS' EQUITY AND LIABILITIES Interest bearing debt

80 786 20 053

85 060 18 919

78 464 21 177

Current assets Inventories Trade receivables and other receivables Cash and cash equivalents Total current assets

568 748 460 234 754 091 855

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CASH FLOW STATEMENT 1 000 EUR Profit for the period Adjustments Change in working capital Net financial items and taxes Net cash from operating activities

1-3/2005

1-3/2004

1-12/2004

1 246 1 551

2 085 1 576

6 969 7 522

-940 -388 1 469

-2 168 -250 1 243

-1 194 -1 045 12 253

Aquisitions of subsidiaries and associates Purchase of other non-current assets Other investments Sales of other non-current assets Net cash used in investing activities

-324

-4

-1 069

-628 -1 455 48 -2 359

-1 374 -1 700 239 -2 839

-4 359 -411 664 -5 175

Issue of share capital Change in short term loans Change in long term loans Payment of finance lease liabilities Dividends paid and equivalents Other financing items Net cash used in financing activities

0 0 -474 -39 -122 69 -566

3 0 -929 -39 -277 6 -1 236

3 10 000 -8 772 -196 -13 869 -829 -13 663

-1 456

-2 832

-6 585

28 418

35 003

35 003

26 961

32 171

28 418

1-3/2005

1-3/2004

1-12/2004

615 2.1

1 380 4.6

9 029 7.5

932 245 1 177

905 264 1 169

940 263 1 203

31.3.2005

31.3.2004

31.12.2004

Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period INVESTMENTS 1 000 Investments in non-current assets % of net sales AVERAGE NUMBER OF EMPLOYEES Talentum Group Part-time telemarketing staff Total CONTINGENT LIABILITIES 1 000 EUR Given as security loans with securities as collateral Rental and other commitments Leasing commitments NUMBER OF SHARES Adjusted average number Number at the end of period KEY FIGURES Earnings per share, adjusted (EUR) Equity per share (EUR) Equity ratio, %

17 4 22 3

220 365 092 343

17 5 8 3

220 015 591 382

17 4 22 3

220 308 924 361

42 354 126 42 370 176

41 479 430 41 479 430

41 793 256 42 298 780

0.03 0.43 34.86

0.04 0.50 39.33

0.15 0.54 42.34

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STATEMENT OF CHANGES IN EQUITY 1 000 EUR

Equity

Share premium reserve

Fair Exchange value differeserve rencies and other reserves

Equity 1.1.2004 Options exercised Net income recognised directly in equity Profit for the period Dividends paid Issue of share capital Equity 31.3.2004

8 759

391

8 763

391

7 183

Equity 31.12.2004 Translation differencies Options exercised Net income recognised directly in equity Profit for the period Dividends Issue of share capital Share premium Equity 31.3.2005

17 863

-4

7

7 204

86

Retained earnings

Minority Total interest equity

8 899 35

12 561 37 901 23 58 -21

-21 -80

-45

-125

1 798

288

2 085

-6 222

-315 -6 537 3

86

4 429

12 512 33 364

84

5 028 87

9 875 32 853 16 103

3

8

54 22

36 2

90 32

1 276

-29

1 246

-6 356 29

17 892

171 167

15

84

110

-121 -6 477 29 171 9 779 28 047

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TALENTUM GROUP / SUB-SEGMENTS 1 000 EUR Net sales Publishing TV content production Premedia Direct marketing Internet consulting Sales within group Total

1-3/ 2005 12 5 5 1 5 -1 29

224 837 190 672 809 002 730

1-3/ 2004 11 5 5 1 6 -1 29

289 713 807 963 124 083 813

1-6/ 2004 23 11 11 3 12 -2 60

010 677 246 785 404 083 039

1-9/ 2004 32 16 15 5 16 -2 84

729 533 841 234 947 872 412

1-12/ 2004 48 23 21 6 23 -3 119

895 168 210 885 602 387 923

Operating profit Publishing TV content production Premedia Direct marketing Internet consulting Parent company and group items Total

2 006 104 260 278 -280 -474 1 895

1 426 219 490 417 404 -520 2 435

2 594 282 583 702 692 -753 4 100

3 889 -284 759 893 375 -920 4 712

7 947 180 1 204 1 117 651 -1 801 9 298

Average number of employees Publishing TV content production Premedia Direct marketing Internet consulting Group administration Total

276 114 190 292 288 17 1 177

251 120 205 310 266 17 1 169

245 120 200 304 268 17 1 154

266 124 188 291 268 17 1 154

268 124 203 310 281 17 1 203

The forecasts and estimates outlined here are based on the management's current view of economic trends, and the actual results may differ substantially from what is expected of the company at this point.

This Interim Report is unaudited.

TALENTUM OYJ Harri Roschier CEO

FURTHER INFORMATION CEO Harri Roschier, tel. +358 (0)20 442 4220 CFO Kai J채rvikare, tel. +358 (0)40 342 4210 www.talentum.fi COPIES TO Helsinki Stock Exchange Key media