Itella's Financial Statements Bulletin 2009: Building foundations for the future

Year 2009 • Itella Group’s net sales amounted to EUR 1,819.7 million (EUR 1,952.9 million). Net sales fell by 6.8% and comparable net sales excluding the impact of the previous year’s acquisitions and divestments shrank by 11.4%. International operations accounted for 30% of net sales. • Consolidated operating profit including non-recurring items was EUR 46.7 million (EUR 69.0 million), or 2.6% (3.5%) of net sales. Operating profit before non-recurring items amounted to EUR 86.3 million (EUR 95.1 million), representing 4.7% (4.9%) of net sales. • Personnel-related restructuring costs of EUR 29.0 million represented the most significant non-recurring item. An impairment of EUR 10.6 million was recorded on the goodwill of Itella Logistics’ Russian business. • The profitability of Itella Mail Communication declined. The volume of addressed letters fell by 7%. A new sorting technology and carbon neutral Itella Green delivery services were introduced. • Itella Information’s profitability improved and business operations were expanded in Central Europe and in Russia. • Itella Logistics’ performance was negatively affected by the sharp fall in volumes, reflecting the general trend in the industry. • Itella’s investments totaled EUR 144.9 million and they focused primarily on postal services in Finland. This was the last year of major investments in Itella Mail Communication's development program. • The Board of Directors proposes that no dividend be paid. • In connection with its financial statements, Itella will publish a Corporate Governance report. October–December 2009 • Net sales totaled EUR 491.0 million (EUR 561.4 million). • Operating profit before non-recurring items amounted to EUR 39.4 million (EUR 27.0 million), representing 8.0% (4.8%) of net sales. The Group’s operating profit including non-recurring items was EUR 24.6 million (EUR 0.9 million), or 5.0% (0.2%) of net sales. Profit before taxes was EUR 22.2 million (EUR -26.8 million). • Itella Corporation issued a EUR 150 million domestic bond, which was listed on the Helsinki Stock Exchange maintained by NASDAQ OMX Helsinki Oy on December 17, 2009. Key figures of Itella Group 2009 2008 2007 Net sales, MEUR 1,819.7 1 952.9 1 710.6 Operating profit (EBIT), MEUR 46.7 69.0 101.8 EBIT margin, % 2.6 3.5 6.0 Operating profit (EBIT), MEUR *) 86.3 95.1 101.8 EBIT margin, % *) 4.7 4.9 6.0 Profit before tax, MEUR 19.6 46.6 109.5 Return on equity, % -0.7 2.6 11.1 Return on investment, % 5.8 12.4 15.6 Equity ratio, % 48.5 51.1 65.9 Gearing, % 19.7 14.8 -36.4 Personnel on average 30,217 28,163 25,623 Capital expenditure, MEUR 144.9 351.5 94.2 Dividends, MEUR - 10.0 39.0 *) Excl. non-recurring items Jukka Alho, President and CEO: ”In 2009, we focused on building a competitive business for the future and on adjusting operations to changes in demand. Despite the challenging market situation, our profitability excluding non-recurring items was nearly on previous year’s level. Full-year earnings were taxed by significant personnel-related non-recurring costs. In the final quarter, our efficiency enhancement measures began to take effect and operative profitability strengthened from the reference period a year earlier. All in all, Itella has emerged from the economic slump as a financially sound company. This could be attributed to our healthy cash flow, which remained steady despite the economic turmoil. Itella Information’s business saw particularly positive development, and profitability showed a marked improvement from the previous year. Itella Mail Communication’s net sales fell by 2.1 per cent. Even though the digitization of invoicing and other transaction communication is now well and truly under way, the impact of this trend on Itella’s letter deliveries has been surprisingly small. The delivery volume decline was very moderate considering the low economic cycle. Itella Logistics’ business depends heavily on industrial imports and exports as well as on consumer goods trade. Volume reductions in the logistics business have varied between 10 and 30 per cent, depending on the business area. According to the customer survey, consumers are more satisfied with Posti than ever. 83 per cent evaluated Posti’s service “good” or “excellent”. We are taking determined efforts to prepare Itella for the enforcement of the new Postal Services Act at the beginning of 2011. For several years, we have invested in the modernization of mail processing machinery and in measures to boost our operational efficiency. NetPosti – our response to the digitization of consumer transactions – has gained an established position in the market. NetPosti will be equipped with the eInvoice receiving feature, which will make it a unique service, even by international standards. We are in a position to build such a service thanks to Itella IPS Oy (Itella Payment Services). IPS Oy was established in 2009, and it was licensed by the Financial Supervisory Authority to act as a payment institution and equipped with the necessary technical production facilities in record time. We can now offer customers, both businesses and consumers, more flexibility in their online transactions.” APPENDICES Itella's full financial statements bulletin Corporate Governance report FINANCIAL CALENDER 2010 Annual Report 2009 will be published in week 11 (Finnish) and week 12 (Swedish, English) Interim Report Q1 on Friday, April 30 Interim Report Q2 on Wednesday, July 28 Interim Report Q3 on Wednesday October 27 FURTHER INFORMATION Jukka Alho, President and CEO, tel. +358 20 451 5600, jukka.alho@itella.com Tuija Soanjärvi, CFO, tel. +358 20 45 20907, tuija.soanjarvi@itella.com http://www.itella.fi/group/english/financials PHOTOS AND LOGOS http://www.itella.fi/group/english/media/ Itella Group provides solutions for managing information and product flows. Itella operates in mail communication, information logistics and logistics in northern and central Europe, and in Russia. The Group employs some 30,000 staff and reported net sales of EUR 1,820 million in 2009. Corporate services are delivered under the Itella brand, while the Posti brand is used for services targeted at consumers in Finland. More information on the Group is available at www.itella.fi/group/english.