Tallink Grupp — Interim / Quarterly Report 2021

Apr 29, 2021

Q1 2021

TALLINK GRUPP AS RESULTS WEBINAR

PRESENTERS

PAAVO NÕGENE CHAIRMAN OF THE MANAGEMENT BOARD

HARRI HANSCHMIDT MEMBER OF THE MANAGEMENT BOARD

JOONAS JOOST FINANCIAL DIRECTOR

TALLINK GRUPP

The leading European provider of leisure and business travel and sea transportation services in the Baltic Sea region.

OPERATIONS

• Fleet of 15 vessels
• Seven ferry routes (3 suspended)
• Operating four hotels (3 closed until 2021 high season)

KEY FACTS

• Revenue of EUR 443 million in 2020
• Served 3.7 million passengers in 2020
• Transported 360 thousand cargo units
• Operating EUR 1.5 billion asset base
• 3 953 employees (end of Q1 2021)
• 2.8 million loyalty program members

STRONG BRANDS

COVID-19 IMPACT ON TRANSPORTED PASSENGERS

TRAILING TWELVE MONTHS VS 2016-2019 AVERAGE 7-DAY MOVING AVERAGE 2.4M PAX, -74% Y-O-Y

OPERATIONS STRONGLY AFFECTED BY THE COVID-19 AND RESTRICTIONS ON INTERNATIONAL TRAVEL

STEPS TAKEN TO KEEP PROVIDING SAFE TRAVELLING FOCUS ON FLEXIBILITY, COSTS AND LIQUIDITY

• Strict hygiene and disinfecting procedures and requirements
• Temporary suspension of ship and hotel operations
• Activities to ensure liquidity
• Scaled down on non-critical costs and investments
• Cost savings from previously implemented measures
• Applying for various support measures
• No dividends proposed by Management
• Postponement of investments, taxes
• Negotiations with financial institutions to amend and prolong the waivers of financial covenants and to postpone principal payments under existing loan agreements

Silja Serenade in Riga

2021 Q1 HIGHLIGHTS AND KEY FACTS

ENVIRONMENT AND ADJUSTMENTS

• Extensive impact of Covid-19 and suspension of cruise ferries operations
• Stricter restrictions imposed by the governments

ACTIVITIES TOWARD LONG-TERM SUSTAINABILITY

• Continuous cost control to ensure efficiency and savings from previously implemented measures
• Opening of second Burger King restaurant in Latvia
• Legal action against Port of Tallinn filed
• EUR 15.4 million damage compensation claim for abusing the dominant position on the market for provision of port services in Old City Harbour

Image courtesy of RMC

Q1 2021 OVERVIEW – COVID-19 & TRAVEL RESTRICTIONS

Q1 Selected Key Figures (financials in million euros)	2021	2020	Change
Number of passengers	267 224	1 566 730	-82.9%
Number of cargo units	85 156	99 617	-14.5%
Number of passenger cars	75 815	190 292	-60.2%
Revenue	53.7	154.9	-65.3%
Gross profit / loss	-20.0	-0.2	-
EBITDA	-6.3	-1.3	-400.6%
EBIT	-30.0	-26.0	-15.2%
Net result for the period	-34.4	-30.2	-14.0%
Capital expenditures	4.2	27.1	-84.5%
As at:	31.03.21	31.12.20	Change
Total assets	1 492.5	1 516.2	-1.6%
Total equity	680.1	714.3	-4.8%
Interest-bearing liabilities	728.3	705.1	3.3%
Net debt	713.5	677.3	5.4%
2021 unaudited

• Revenue EUR 53.7m (EUR -101.2m or -65.3% vs LY)

• Extensive impact from Covid-19 related travel restrictions
• More limited impact on cargo operations
• 16% less departures compared to Q1 2020

• Cost reduction & support

• Cost of sales reduced by 52% or EUR 81m
• Administrative & marketing cost reduced by 45% or EUR 12m
• Direct financial support of EUR 5.0m in Q1 2021
• EBITDA of EUR -6.3m (EUR -5.1m vs LY)
• Net loss of EUR 34.4m (EUR -4.2m vs LY)

RESULTS QUARTERLY SEASONALITY BREAKDOWN

1.9 1.9 1.6 0.3 2.6 2.7 0.4 2.9 3.0 1.3 2.2 2.3 0.5 2019 2020 2021 9.8 9.8 3.7

PASSENGERS (MILLIONS)

REVENUE (EUR MILLION)

CARGO (TH. UNITS)

EBITDA (EUR MILLION)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

THE DYNAMICS OF HIGH SEASONALITY ON THE PROFIT LEVEL

NET PROFIT BY QUARTERS (EUR MILLION)

MOST OF THE PROFITS ARE TYPICALLY EARNED IN THE SUMMER, THE HIGH SEASON

Q1 REVENUE DEVELOPMENT BY OPERATING SEGMENTS (EUR MILLION)

Restaurant and shop sales on-board and onshore and ticket sales decline driven by decline in passengers

Lower cargo sales due to absence of operation of six vessels on long routes; weak market and tight price competition

Effectively only one hotel operated in Q1 2021

Adjustment in charter agreement effective from Q4 2020

REVENUE STRUCTURE IN Q1 2021

GRUPP

2020 unaudited

Q1 REVENUE DEVELOPMENT BY GEOGRAPHICAL SEGMENTS (EUR MILLION)

Revenues of all routes negatively affected by Covid-19, travel restrictions, suspensions in operations and weak cargo market

Estonia-Finland

The results reflect the operations of the Estonia-Finland two shuttle and one cargo vessel (operations of Silja Europa were suspended)

Estonia-Sweden

The results reflect the operations of two cargo vessels on Paldiski-Kapellskär route (two cruise ferries suspended)

Latvia-Sweden

No daily operations – two Cruise ferries suspended

Finland-Sweden

The results reflect the operations of two cruise ferries on Turku-Stockholm route (two Helsinki-Stockholm route cruise ferries suspended)

CONSOLIDATED INCOME STATEMENT

(EUR million)	2019	2020	Q1 2020	(3) Q1 2021
Sales	949	443	155	54
Cost of sales (1)	(752)	(486)	(155)	(74)
Marketing & administrative cost (1)	(125)	(86)	(27)	(15)
Other operating items, net (2)	2	37	2	5
EBITDA	171	8	(1)	(6)
Margin (%)	18.0%	1.8%	(0.8%)	(11.7%)
Net Result	50	(108)	(30)	(34)
EPS	0.074	(0.162)	(0.045)	(0.051)

Totals may not sum due to rounding

(1) Includes depreciation and amortization

(2) Q1 2021 includes EUR 5.0m direct financial support; 2020 includes EUR 36.6m net direct financial support

(3) Unaudited

TALLINK GRUPP

CONSOLIDATED CASH FLOW STATEMENT

(EUR million)	2019	2020	Q1 2020	(1) Q1 2021
Operating cash flow	175	(7)	1	(22)
Capital expenditure	(61)	(100)	(27)	(4)
Asset disposal	0	0	0	0
Free cash flow	114	(107)	(26)	(26)
Debt financing (net effect)	(52)	112	9	19
Interests & other financial items	(17)	(16)	(5)	(5)
Dividends & reduction of share capital	(80)	0	0	0
Income tax on dividends paid	(8)	0	0	0
Change in cash	(43)	(11)	(22)	(13)

Totals may not sum due to rounding (1) Unaudited

TALLINK GRUPP

CASH FLOW GENERATION AFFECTED BY COVID-19

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(EUR million)	31.12.2019	31.03.2020	31.12.2020	(2) 31.03.2021	1500	Cash Intangibles	Other liabilitie
Total assets	1 533	1 518	1 516	1 493		Other	s
Non-current assets	1 412	1 419	1 427	1 410		assets
Current assets	121	99	89	83			Share holders
- of which cash	39	16	28	15	1000		' equity
Total liabilities	710	725	802	812
Interest bearing liabilities	578	591	705	728
Other liabilities	132	134	97	84
Shareholders' equity	823	793	714	680	500	Ships
							Loans
Net debt/EBITDA	3.1x	3.5x	84.2x	238.7x
Net debt	539	575	677	714
Equity/assets ratio	54%	52%	47%	46%
(1) BVPS (in EUR)	1.23	1.18	1.07	1.02	0	Assets	Liabilities &
Totals may not sum due to rounding							Equity

(1) Shareholders' equity / number of shares outstanding

(2) Unaudited

TALLINK GRUPP

AT THE END OF THE QUARTER TOTAL LIQUIDITY EUR 96.4 MILLION (EUR 79.2 MILLION IN 2020 Q1)

14

DEBT STRUCTURE

LONG TERM BANK LOANS

• EUR 572 million as at 31.03.2021
• 7 loan agreements outstanding: syndicated loans, amortizing project and working capital loans
• Maturities 1-8 years
• EUR denominated, fixed and EURIBOR floating

OVERDRAFTS (as at 31.03.2021)

• EUR 53 million used
• EUR 82 million unused

SIGNED, NOT YET DRAWN

• EUR 198 million from KfW IPEX-Bank GmbH (MyStar)
• EUR 90 million undrawn of EUR 100 million working capital loan from Nordic Investment Bank

Total EUR 728 million interest bearing liabilities as at 31.03.2021

2021 unaudited

ONGOING NEGOTIATIONS TO POSTPONE PRINCIPAL PAYMENTS UNDER EXISTING LOAN AGREEMENTS

EVENTS AFTER THE REPORTING PERIOD & OUTLOOK

Rendering of renovated Tallink City hotel

• In June 2021, two new Burger King restaurants are planned to be opened in Latvia. Ongoing preparations for opening 5 more Burger King restaurants in 2021
• Completion of renovation and planned reopening of Tallink City Hotel in June 2021
• Progress regarding vaccinations in Group's main markets in Estonia and Finland provides a positive outlook for traffic recovery between countries

Due to the ongoing Covid-19 situation the earnings outlook is uncertain and continues to be largely subject to external factors such as the progress of vaccinations, states' decisions regarding the timing of lifting of the travel restrictions, allowing passenger traffic as well as the duration of the recovery period.

Management expects the passenger traffic between Estonia and Finland to recover rapidly after the restrictions have been lifted.

QUESTIONS & ANSWERS

THANK YOU

AS Tallink Grupp Sadama 5, 10111, Tallinn, Estonia investor@tallink.ee