Panostaja Oyj : Business Review Q3 2021

PANOSTAJA Business Report Q3 2

PANOSTAJA OYJ'S BUSINESS REVIEW

Active summer in corporate acquisitions

May 1, 2021-July 31, 2021 (3 months)

• Net sales increased in two of the five segments. Net sales for the Group as a whole increased by 3% to MEUR 32.7 (MEUR 31.7).
• EBIT improved in one of the five segments. The entire Group's EBIT declined from the reference period, standing at MEUR 0.5 (MEUR 0.7).
• Grano's net sales for the review period increased by 8% from the reference period in the previous year. EBIT totaled MEUR 1.1 (MEUR 0.7).
• Earnings per share (undiluted) were 0.6 cents (-0.4 cents).
• In the review period, Panostaja signed an agreement on selling the share capital of Heatmasters Oy and its Polish subsidiary. Panostaja Group recorded a sales profit of about MEUR 0.5 for the trade.
• Panostaja's associated company Spectra Yhtiöt Oy was sold to Lassila & Tikanoja Oyj. Panostaja divested its ownership and recorded a sales profit of about MEUR 0.4.

November 1, 2020-July 31, 2021 (9 months)

• Net sales increased in one of the five segments. Net sales for the Group as a whole weakened by 6% to MEUR 103.5 (MEUR 109.6).
• EBIT improved in one of the five segments. The entire Group's EBIT declined from the reference period, standing at MEUR -1.5 (MEUR 0.9).
• Grano's net sales for the review period dropped by 2% from the reference period in the previous year. EBIT totaled MEUR 1.8 (MEUR 1.5).
• Earnings per share (undiluted) were -6.9 cents (-3.6 cents).

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PANOSTAJA Business Report Q3 3

CEO Tapio Tommila:

"Activity in the corporate acquisitions market has remained good in the review period, and we ended up making two deals. We sold Heatmasters to a Finnish investment group at the beginning of June and our associated company Spectra Yhtiöt to Lassila & Tikanoja Oyj in early July. Our journey with both companies had been long, and now was the right time to divest and usher the companies to their next phase of development with new owners. The divestments also support our goal of actively developing our portfolio.

Over the course of the review period, the total net sales of our segments increased by 3% from the review period, thanks to the improved net sales of Grano and Hygga. Grano's net sales grew by 8% especially due to strong demand early on in the review period and the strong performance of the construction sector through the summer. The increase in Hygga's net sales resulted from the services sold to the City of Helsinki, which is still somewhat constrained by the availability of labor.

The decline of the net sales of Carrot and CoreHW continued in the review period. Carrot's customer activity increased during the summer, but the shortage of skilled labor makes it more difficult to increase net sales. CoreHW's customer demand and number of tenders have continued to grow in the review period but, due to lengthy negotiation processes, this is not reflected by the development of net sales. Moreover, the development of Oscar Software's net sales was lower than intended in the review period, largely due to resource challenges affecting the project organization. The shortfalls in net sales impacted profitability and, overall, the Group's EBIT declined slightly from the review period."

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PANOSTAJA Business Report Q3 4

Segments 3 months

Grano

Grano is Finland's leading content and marketing services company

Grano's net sales for the review period were MEUR 25.1, which was 8% above the reference period level (MEUR 23.1). Grano's EBIT for the review period stood at MEUR 1.1, which is an increase of MEUR 0.3 from the reference period (MEUR 0.7).

Over the course of the review period, there was months-long fluctuation in demand between the business areas, as was the case early in the year. Demand was strong in May, but customer activity was lower than expected in the summer months. The impacts of the coronavirus pandemic were still evident in the product lines with the highest net sales, such as sheet printing and large-scale prints, for which the low number of events was reflected by the demand. On the other hand, demand among the construction sector customers remained strong through the summer. Demand also remained good for the packaging and translation business.

MEUR	3 months		3 months	9 months	9 months	12 months
			5/21-7/21	5/20-7/2011/20-7/2111/19-7/20	11/19-10/20
Net sales, MEUR	25.1	23.1	79.3	80.9	109.9
EBIT, MEUR	1.1		0.7	1.8	1.5	4.8
Interest-bearing net			55.6	64.3	55.6	64.3	60.6
liabilities
Panostaja's holding			55.2%

www.panostaja.fi

PANOSTAJA Business Report Q3 5

Hygga

Hygga provides dental care and health care ERP services with a new operating concept

Hygga's net sales of MEUR 2.0 for the review period were MEUR 1.0 higher than in the reference period (MEUR 1.0). The increase in net sales came from the clinic business, which began providing outsourced services to the City of Helsinki starting from November 1. EBIT stood at EUR 0.0, which was slightly lower than in the reference period (MEUR 0.1).

As regards Hygga's own private clinic business, demand varied during the review period in accordance with the changing coronavirus situation. Operational development efforts were continued during the review period for outsourced services in Helsinki. The growth and profit of the clinic business is partially encumbered by the poor availability of skilled personnel.

For the licensing business, the acquisition of new customers remains slow in the Finnish and international markets as a result of the coronavirus pandemic. There is still demand and interest for Hygga's solutions on the markets, but customers are less willing to deploy new operating models as a result of the health care situation caused by the pandemic.

MEUR	3 months	3 months	9 months	9 months	12 months
	5/21-7/21	5/20-7/20	11/20-7/2111/19-7/20	11/19-10/20
Net sales, MEUR	2.0	1.0	6.0	3.1	4.1
EBIT, MEUR
0.0	0.1	-0.4	0.0	-0.3
Interest-bearing net liabilities
8.9	7.3	8.9	7.3	7.6
Panostaja's holding
79.8%

www.panostaja.fi