Tallink Grupp

Earnings Release • Mar 17, 2015

• Tallink is the leading European provider of leisure and business travel and sea transportation services in the Baltic Sea region
• Fleet of 18 vessels
• Operating five hotels
• Revenue EUR 921 million
• EUR 1.7 billion asset base
• Nearly ⁷⁰⁰⁰ employees
• 8.9 million passengers annually
• ³¹⁰ thousand cargo units annually
• Listed on Nasdaq OMX Baltic TAL1T

Over 50 years of operating and cruising experience

Tallink's business model

Product offering

1-2 overnight cruises & passenger transportation

On-board tax-free shopping

Hotel & travel packages City break

Shuttle service

Cargo transportation

Revenue structure 2014

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Tallink's position in the global ferry market

The World's top Duty free & Travel Retail Shops 2013

Ranking by actual and estimated retail sales in US\$ millions.

			1	Stena Line
	Rank Location	Remarks	2	Grimaldi Lines
	Sales> US\$ 1,000.0 million		3	Tallink
1	Dubai - Dubai International Airport, U.A.E.	AIRPORT SHOPS	4	P&O Ferries
	2 Seoul - Incheon Int'l Airport, South Korea	AIRPORT SHOPS	5	Tirrenia
3	Singapore - Changi Airport	AIRPORT SHOPS
	4 London - Heathrow Airport, UK	AIRPORT SHOPS
5	Bangkok - Suvarnabhumi Airport, Thailand	AIRPORT SHOPS		Rank Company
	6 Hong Kong - Hong Kong International Airport	AIRPORT SHOPS	1	Tallink
	Sales> US\$ 800.0 million
7	Shanghai – Pudong Airport, China P.R	AIRPORT SHOPS	2	Viking Line
8	Beijing – Capital Airport, China P.R.	AIRPORT SHOPS	3 4	Stena Line Tirrenia
	Sales> US\$ 600.0 million		5	Grand Navi Veloci
9	Paris - Charles de Gaulle Airport, France	AIRPORT SHOPS
	10 Frankfurt – Frankfurt-Main Airport, Germany	AIRPORT SHOPS
11	Tallink/Silja Line	FERRIES		Rank Company
12	Taipei - Taoyuan International Airport, Taiwan	AIRPORT SHOPS	1	DFDS Group
	Sales> US\$ 300.0 million
	13 Sao Paulo - Guarulhos Int'l Airport, Brazil	AIRPORT SHOPS	2	Stena Line
14	Amsterdam - Schipol Airport, Netherlands	AIRPORT SHOPS	3	Tallink
15	Oslo – Gardermoen Airport	AIRPORT SHOPS	4	Finnlines
			5	Scandlines

Data: Ro/pax / ferries above 1,000 GT Source: ShipPax MARKET:14

	Rank Company	Gross tons
1	Stena Line	878 919
2	Grimaldi Lines	750 089
3	Tallink	537 232
4	P&O Ferries	409 659
5	Tirrenia	373 911

	Rank Company	Beds
1	Tallink	26 428
2	Viking Line	16 826
3	Stena Line	15 619
4	Tirrenia	10 442
5	Grand Navi Veloci	10 434

		mEUR
	Rank Company	Revenue
1	DFDS Group	1 625
2	Stena Line	1 090
3	Tallink	942
4	Finnlines	564
5	Scandlines	505

Strategic plan

Tallink's vision is to be the market pioneer in Europe by offering excellence in leisure and business travel and sea transportation services

Long term objectives toward increasing the company value and profitability:

• Strive for the highest level of customer satisfaction
• Increase volumes and strengthen the leading position on our home markets
• Develop a wide range of quality services directed at different customers and pursue new growth opportunities
• Manage the optimal debt level that will allow sustainable dividends

Current strategic cornerstones and competitive advantages:

Most modern	Wide route	Strong market share &	High safety level &
fleet	network	brand awareness	environmental standards

Tallink's passenger market share is 46% of the Northern Baltic Sea

Northern Baltic passenger market ~ 19 million passengers (8.9M)

We are targeting new customers from a wider country base More than 10% of our passengers come from outside of our home markets

	Web sales sites in 17 language China	Finland	Italy	Lithuania	Poland	Russia
8	Denmark Estonia	France Germany	Japan Latvia	Netherlands Noway	Spain Sweden	International

Highlights and milestones

Tallink's performance after the management buyout

• 2014 highlights
• Re-routing of vessels
• More vessels out of service, therefore less departures
  • Two core vessels out of operation on the Hel-Sto route for altogether 81 days
• Upgrades and refurbishments of vessels around EUR 30 million
• Competitor increased capacity in summer months on Tallinn-Helsinki route
  • Resulted in decreased revenue per passenger
• Weak Nordic economies
• Geopolitical events in Europe
  • Noticeable drop of passengers from the Russian market
• Cargo shift from longer to shorter routes
  • Margins affected
• Outlook
• Positive effect expected from charters and re-routings
• Positive feedback from upgraded vessels
• Global fuel price indication lower for 2015, compered to 2014
• Sale of Silja Festival and Regina Baltica

One off effects

Market shares Passenger operations

Tallinn - Helsinki

Latest developments

• Expansion of shop areas and modernizing restaurant areas to improve the performance through retail space
• Modern retail environment visual
• Wider selection of the products
• Developing on-board areas with the goal: approchable, comfortable and customer friendly
• Responding to higher expectations of the passengers

Helsinki – Stockholm retail space upgrade 2014

• Silja Serenade upgrade in spring and Silja Symphony followed in autumn
• 50% expanded shopping areas including a new Superstore, upgraded Grand Buffet concept and a new Italian restaurant
• Overall investment in to the vessels public space upgrades on the Helsinki-Stockholm route in 2014 was around EUR 30 million

Ready to take the next step on the Tallinn-Helsinki route

LNG powered fast ferry for the Tallinn-Helsinki shuttle service

Specifications

Built in: Meyer Turku Shipyard Gross tonnage: 49 000 Length: 212 meters Capacity: 2800 passengers Engine: Dual fuel Service speed: 27 knots Delivery date: early 2017

Financing

The vessel cost is approximately EUR 230 million 20% will be paid during the construction period 80% will be financed with long term bank debt on delivery of the vessel

Goal: to continue deleveraging and not exceed the current debt level

Results quarterly seasonality breakdown

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Revenue (EUR millions) EBITDA (EUR millions)

The dynamics of high seasonality on the profit level Net result by quarters

Typical to the Tallink business model is that most of the result is made in the summer, the high season.

Unaudited Consolidated Income Statement

(in EUR million)	2013	2014
Sales	942	921
Cost of sales (1)	(751)	(740)
Marketing, general & admin (1)	(108)	(112)
EBITDA	156	151
Margin (%)	16.6%	16.3%
Net Profit	43	27
EPS	0.06	0.04

Notes:

(1) Includes depreciation and amortization

Unaudited costs breakdown

	2013	2014	Change %
Cost of goods	220 222	211 211	-4%
Fuel cost	129 826	114 008	-12%
Staff costs	135 053	139 660	3%
Marketing & Administration (1)	100 316	103 690	3%
Port & stevedoring	96 295	95 329	-1%
Ship operating expenses	74 017	77 930	5%
Other costs	31 363	30 417	-3%
Total costs from operations	787 092	771 746	-2%
Depreciation and amortisation	73 175	79 908	9%
Net finance cost	35 956	40 683	13%
Total costs	896 223	892 337	0%

1) Amortisation and depreciation excluded

Unaudited Consolidated Cash Flow Statement

(in EUR million)	2013	2014
Operating cash flow	168	151
Capital expenditure	(43)	(49)
Asset disposal	1	0
Free cash flow	126	102
Debt financing (net effect)	(40)	(46)
Interests & other financial items	(38)	(37)
Dividend paid	(33)	(20)
Dividend tax	(9)	(5)
Change in cash	6	(7)

Unaudited Consolidated Statement of Financial Position

(in EUR million)	31.12.2011	31.12.2012	31.12.2013	31.12.2014
Total assets	1,800	1,742	1,722	1,686
Non-current assets	1,657	1,599	1,572	1,545
Current assets	143	143	150	140
- of which cash -	75	66	72	65
Total liabilities	1094	981	951	907
Interest bearing liabilities	960	840	794	743
Other liabilities	134	141	157	170
Shareholders' equity	705	761	771	778
Net debt/EBITDA	5.4x	4.7x	4.6x	4.5x
Net debt	884	775	722	678
Equity/assets ratio	39%	44%	45%	46%
BVPS (1) (in EUR)	1.05	1.14	1.15	1.16

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• Our ice-classed fleet is versatile to operate anywhere
• We have experience in selling and chartering vessels all over the world

Total EUR 743 million interest bearing liabilities outstanding as of 31.12.2014

Amount:	NOK 900M (EUR 118M)
Cost:	3M NIBOR + 5.00%
	(3M EURIBOR +4.88%)
Type:	Senior unsecured
Issue date:	18.06.2013
Maturity date: 18.10.2018
Listing:	Oslo Børs
Currency risk eliminated by swapping to EUR

100% EUR denominated bank loans

7 standalone loan agreements with bank syndicates

Maturities ~5-10 years

Amortizing project loans

6.64% of debt is fixed rate, rest in EURIBOR floating,1/3 hedged

Unrivalled suite of competitive advantages

Extensive Sales Network

• 21 own sales offices

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• Varied on-board experience

customer preferences

• Travel packages and excursions • Addressing all budget ranges and

Comprehensive offer

• Network of >1,800 travel agents and tour operators worldwide

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• Growing online presence and call centres

Modern fleet

• 11 core vessels have an average age of 12.7 years
• Ice class vessels

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• Luxurious on-board experience, e.g. spacious shopping areas

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• Variety of short cruises between key cities
• Optimised schedules with frequent and reliable departures all year
• Established relationships with port authorities

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Strong quality brands

• Silja Line and Tallink are the most recognised cruise brands in the Northern Baltic Sea Region
• They are associated with a quality customer experience Finland Estonia Sweden

1 1

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47% Market share of the Northern Baltic Sea Region passenger market

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• 8.9M passengers in 2014
• Nearly 1.8 million Club One card holders growing at 11% in 2014

Loyal customer base

• Every third passenger is a club one member.

• High safety and environmental standards
• We proactively seek compliance with the highest standards
• In 2014, only 2 of the over 9000 scheduled trips were cancelled for technical reasons

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Tallink's Fleet

Baltic Queen Built: 2009 Length: 212m Passengers: 2800 Lane meters: 1130

Baltic Princess Built: 2008 Length: 212m Passengers: 2800 Lane meters: 1130

Victoria I Built: 2004 Length: 193m Passengers: 2500

Galaxy Built: 2006 Length: 212m Passengers: 2800 Lane meters: 1130

Silja Europa Built: 1993 Length: 202m Passengers: 3123 Lane meters: 932

Silja Serenade Silja Symphony Built: 1990/91 Length 203m Passengers: 2852 Lane meters: 950

Tallink has invested 1.3 billion EUR to create a modern fleet

Tallink's Fleet

Superstar Built: 2008 Length 177m Passengers: 2080 Lane meters: 1930

Romantika Built: 2002 Length 193m Passengers: 2500 Lane meters: 1030

Star Built: 2007 Length 186m Passengers: 1900 Lane meters: 2000

Isabelle Built: 1989 Length 171m Passengers: 2480 Lane meters: 850

Superfast VII/VIII/IX Built: 2001/2002 Length: 203m Passengers: 717

Silja Festival Built: 1986 Length 171m Passengers: 2023 Lane meters: 885

In addition the Group has 2 ro-pax cargo vessels in operation and 1 older ferry which has been chartered out

Ownership structure

Shareholders of AS Tallink Grupp

Top 10 shareholders Institutional investors Retail investors

Ten largest shareholders in the end of Q4

Infortar	36%
Baltic Cruises Holding, L.P.	17%
Nordea Bank Finland PLC / non-resident legal entities	8%
ING Luxemburg S.A	7%
State Street Bank and Trust Omnibus fund	2%
Skandinaviska Enskilda Banken AB Clients (East Capital)	2%
JP Morgan Chase Bank / London Client's account	1%
Firebird Republics Fund Ltd	1%
Skandinaviska Enskilda Banken Finnish Clients	1%
Luksusjaht AS	1%

Safety, security and environmental protection are a high priority

• Safety and Security Policy
• Environmental Policy
• ISO 14001:2004 Environmental Certificate by Lloyds Register
• MARPOL Sewage Pollution Prevention Certificate
• MARPOL Air Pollution Prevention Certificate
• International Anti-Fouling System Certificate
• MARPOL Oil Pollution Prevention Certificate
• Document of Compliance for Anti-Fouling System
• MARPOL Garbage Pollution Prevention Attestation
• Passenger Ship Safety Certificate
• International Ship Security Certificate
• Safety Management Certificate
• Document for Dangerous Goods