Quiet trading continued. Investor Calendar: Attention: Please note important background and customer information at the end of this report

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1 Equity Equity Research - Friday, April 15, 2011 Baltic Indices Jan 15-Feb 15-Mar 15-Apr Baltic Benchmark OMX Riga* * Relative to Baltic Benchmark OMX Tallinn* OMX Vilnius* Source: Reuters, Swedbank Index value OMX Tallinn % 2.8% OMX Riga % 5.1% OMX Vilnius % -5.1% OMX Baltic Bench % -1.3% OMX Baltic % -2.2% S&P 500 1, % 4.5% STOXX Europe % 0.4% STOXX EU Enlarged % 5.0% RTS 2, % 14.8% Top gainers: Last Close ( ) Siauliu Bankas % Ventspils Nafta % Ukio Bankas % Sanitas % SAF Tehnika % Top losers: Last Close ( ) Latvian Shipping Company % LESTO % Grigiskes % Pieno Zvaigzdes % Klaipedos Nafta % Most active: Last Close ( ) Olympic Entertainment Group % Tallink % Silvano Fashion Group % Linas Agro Group % Tallinna Kaubamaja % YTD Source: Bloomberg Turnover ( th) Source: Bloomberg Turnover ( th) Source: Bloomberg Turnover ( th) Source: Bloomberg Top company and macro news Olainfarm - top-line beats in Q1 2011, strong guidance given for 2011 Olympic EG revenues in the Baltics matched expectations Ekspress Grupp double-digit sales growth continued in March Premia Foods As annual growth driven by St.Petersburg acquisition Grigiskes new emission is planned, which revokes pre-emptive rights of existing shareholders Vilkyskiu pienine monthly sales up 40% y/y in March Snaige redeemed 61,372 bonds issued in 2010 Quiet trading continued Trading in Tallinn remained quiet with some block trades in the shares of Olympic EG, Silvano FG, Tallink Group and Tallinna Kaubamaja. These were also the most actively traded shares in the week. OMXT index closed down 1.4%, and the biggest losers were Premia Foods, Tallink and Baltika. Top gainer was Olympic EG, but the stock was really volatile during the trading-week (low EUR 1.48, high EUR 1.58). There was considerable selling pressure on Monday and Tuesday. After the announcement that the company pays out EUR 0.1 per share to shareholders, the stock soared however, although it gave back some ground later on. Like in Tallinn, rather quiet trading continued in Riga, where index closed down slightly. The biggest turnover was seen in Grindeks due to one block trade crossed on Monday. The positive news on contract in North America buoyed the shares of SAF Tehnika at the end of week, Olainfarm however fell slightly, despite of the positive announcement about one of its product having been included in the list of prequalified medicines of the World Health Organisation, which could have a material impact on the company s revenues. After the market closed on Friday, the company also announced that its management proposes to initiate dividend. The management also provided strong guidance for As a result, it s likely that the share will outperform next week. Vilnius Stock Exchange was really quiet compared to earlier weeks. Index lost 1.47%, and the biggest turnover was seen in TEO LT and Linas Agro shares. The losers of the week were Lesto, Rokiskio Suris and Grigiskes. There was a news that minority shareholders in TEO LT, including East Capital and KJK Funds want to include in the agenda of the AGM an item about reduction of the company s share capital by LTL120m to LTL657m. The funds, which represent more than 10% of the share capital of the company, argue that the company holds more than LTL200m on bank account. Next week, the main event will be the Q report of TEO LT. Also, the decision on Tallinna Vesi tariff application by n Competition Authorities is expected. Calendar is rather thin in terms of macro releases. Investor Calendar: Date Issuer/Country Description Period TEO LT Interim financial statements Q Snaige Repeat EGM Sanitas AGM Nordecon Audited results Premia Foods Audited results Producer prices Mar Liepajas Metalurgs Interim report Q Latvia Producer prices Mar Lithuania Industrial production Mar Nasdaq OMX Tallinn closed (national holiday) Source: Nasdaq OMX, Bloomberg Equity Research Large Corporations & Institutions Page 1 of 9

2 Company News Company & expected share impact Positive Neutral Negative Olainfarm top-line beats in Q1 2011, strong guidance given for 2011 Latvian pharma company Olainfarm announced that it will from now on publish its preliminary monthly sales figures by the 15th date of the following month. The company also published its sales for Q1 2011, which amounted to LVL 7.84m (EUR11.6m). The growth rate was a respectable 28% y/y. The sales results exceeded our expectations - we are forecasting 19% top-line growth for It was especially positive that Olainfarm managed to deliver solid growth in its main markets, except for Russia, where growth rate was a more moderate 4.3% y/y. Growth rates in Ukraine and Belorus were however quite impressive. In Ukraine, it s possible that a key driver behind very fast sales growth is the launch of Olvazol, Olainfarm s cardiovascular drug. Olainfarm Recommendation: Buy Target Price: 4.53 Price: 3.05 Analyst: Pertti Rahnel Tel: Olainfarm's sales break-down and growth in Q % 140% 40% 35% 30% 25% 20% 15% 10% 5% 120% 100% 80% 60% 40% 20% 0% 0% Russia Ukraine Belarus Latv ia UK Other countries -20% % of total sales Y/Y growth, rhs Source: Olainf arm The company also sent out draft resolutions of the AGM, scheduled to take place on 29th of April, One of the items on the agenda is notification to the AGM on the budget for 2011, which essentially constitutes a sales and net profit guidance by the management. Olainfarm forecasts 2011 sales to reach LVL29.4m or EUR41m (our forecast LVL 29.8m). The firm forecasts net income to reach LVL5.1m or EUR7.3m, which is substantially higher than our forecast of LVL 2.7m. Most probably it reflects less aggressive budgeting for marketing costs than we expected. It is certainly positive if management is able to deliver fast growth at lower level of marketing costs. Olainfarm s board also proposed dividend payment to the AGM. The company will distribute 14% or EUR0.5m of its 2010 net profit as dividends. Dividend per share amounts to EUR While the dividend yield is small (below 2%), the news is still positive in our view as it makes the stock more appealing for income oriented investors at least on the margin and also signals management s confidence in the future growth. Equity Research Large Corporations & Institutions Page 2 of 9

3 In a separate stock exchange release, Olainfarm announced that its anti-tuberculosis medicine PASA salt was included in the list of prequalified medicines of the World Health Organisation (WHO). This means that the company can sell this medication to the relevant programmes of WHO without separate market authorisation for particular countries (with high incidence of tuberculosis). Within this programme, Olainfarm has already been awarded a first order of received a first order of PASA worth USD 1.4m. Conclusion: All of the news above show that the company has now very good operating momentum. We reiterate a Buy recommendation and a target price LVL3.2. Today, the stock closed at LVL2.16. Olympic EG revenues in the Baltics matched expectations OEG published 2011 Q1 unconsolidated revenues of its Baltic subsidiaries due to the obligation to provide information to local gambling inspectorates. Overall, sales in the Baltics increased by 16% y/y. The fastest growth rate or 19% was recorded in, Latvian and Lithuanian subsidiaries achieved y/y growth of 14.5% and 13.2%. n result includes however online gaming revenues as well and therefore the growth rate is not directly comparable to Latvia and Lithuania. Overall, the Baltic sales were broadly in line with our forecasts - Lithuanian growth lagged somewhat behind, but that was largely offset by n better-than-expected performance. Olympic Entertainment Group Recommendation: Accumulate Target Price: 1.7 Price: 1.53 Analyst: Pertti Rahnel Tel: Sales in OEG Baltic subsidiaries (meur) Latv ia Lithuania 1Q11 1Q10 Source: OEG Equity Research Large Corporations & Institutions Page 3 of 9

4 Ekspress Grupp double-digit sales growth continued in March Ekspress Grupp posted March sales figures, which grew 11.8% yoy to 5.2m. In terms of segments, the greatest improvement over a year was seen in the printing segment, which posted 15% y/y growth, segment sales amounted to 2.6m. The turnover in the Online media segment was up by 10.5% y/y, reaching 693k in March Online media sales were driven by the growth in Delfi (+30% y/y). A growth in the Periodicals segment sales was recorded also, +9.5% y/y to 2.2m in March The reason behind the growth in the Periodicals segment is the increased shareholding of Eesti Päevalehe AS (from 50% to 100%). Normalised Periodicals segment sales had still been down by 4% y/y, said the company. Ekspress Grupp Recommendation: Hold Target Price: 1.72 Price: 1.51 Analyst: Risto Hunt Tel: From 4 May 2011, the Supervisory Board of Eesti Ajalehed AS has decided to elect Janek Luts as the Editor In Chief of Eesti Ekspress, as well as the Management Board member of Eesti Ajalehed AS. Janek Luts has been working in the n media from 1993 and during these years, he has been working in different media forms. Priit Hõbemägi, who for the last five years has served as the Editor In Chief of Eesti Ekspress, will start working in Ekspress Grupp, where he will be responsible for the multimedia newsroom project. Premia Foods As annual growth driven by St.Petersburg acquisition Premia Foods (PRF) turnover in the Q improved by 11.1% y/y to 16.6m. The largest part of revenues came from the Fish and fish products segment revenues in this segment amounted to 7.4m, down 4.1% y/y. Sales in the Frozen foods segment were down by 2.2% yoy, reaching 4.9m. The ice-ream segment, in turn, jumped by 110.4% yoy, amounting to 4m. Behind the superior growth is that the Q includes the revenues form the Khladokombinat No. 1 in St. Petersburg, which revenues were not included into Q sales as the company was not yet owned by Premia Foods by that time. Also, PRF noted that the second reason behind good growth is good results in the Baltic markets, despite of the low season. Premia Foods Recommendation: Accumulate Target Price: 1.02 Price: 0.86 Analyst: Risto Hunt Tel: Grigiskes new emission is planned revoking pre-emptive rights for existing shareholders The AGM of Grigiskes (held on April 26, 2011) will decide on a new up to 10,000,000 shares emission. If the decision is adopted, the authorised capital would increase from the current 60,000,000 up to 70,000,000 shares. The emission is aimed for institutional investors therefore a private placing is chosen. The price will be set based on the demand for the new shares. Grigiskes Recommendation: No reco Price: 0.83 Analyst: Donatas Uzkurelis Tel: Equity Research Large Corporations & Institutions Page 4 of 9

5 Vilkyskiu pienine monthly sales up 40% y/y in March In March Vilkyskiu pienine sales reached LTL 24.4m (EUR 7.1m) or 40% more than for the same period last year. During the January March period sales grew 22% yoy to LTL 63.4m (EUR 18.4m). Vilkyškių pieninė Recommendation: No reco Price: 1.62 Analyst: Donatas Uzkurelis Tel: SAF Tehnika deal with Canadian companies SAF Tehnika announced the deal with two Canadian companies for deploying 200 links in rural province of Canada. SAF stressed that this deal takes the company to the next level in the North America market and opens up new opportunities for building brand awareness in the region. All shipments are planned till the end of the year, financial financial details of the contract were not disclosed however. SAF Tehnika Recommendation: No reco Price: LVL2.70 Analyst: Pertti Rahnel Tel: Snaige redeemed 61,372 bonds issued in 2010 On April 11 Snaige redeemed 61,372 bonds issued in A part of bonds (23,086 pcs) was converted into ordinary shares and the rest was redeemed by Snaige. KJK Fund SICAV-SIF, Firebird Republics Fund, Ltd. and Firebird Avrora Fund, Ltd. (owned 18,859,920 ordinary shares or 61.36% voting rights) during the mandatory non-competitive tender offer to buy the remaining shares in Snaige during March bought up 4,352,213 ordinary shares which represent 14.16% voting rights at the general shareholder meeting. Snaigė Recommendation: No reco Price: 0.31 Analyst: Donatas Uzkurelis Tel: Equity Research Large Corporations & Institutions Page 5 of 9

6 Baltic Equity Trading Statistics Bloomberg Last Upside/ M.Cap, Free float Return Name ticker GICS Sector/ Sub-Industry Country Price ( ) Target ( ) Downside Reco. meur (FF) 1w 1m 6m YTD 52w Apranga APG1L LH Apparel Retail LT 1.89 Under Rev. Under Rev % -1% 7% 15% -9% 59% 37 38% Arco Vara ARC1T ET Diversified Real Estate Activi EE 5.20 Under Rev. Under Rev % -1% 0% 4% -6% 15% 31 50% Baltika BLT1T ET Apparel, Accessories & Luxury EE % Hold 38 60% -3% -2% 12% 7% 67% 32 47% City Service CTS1L LH Environmental & Facilities Ser LT % Accumulate 91 30% 1% 11% 6% 3% 9% 51 30% Ekspress Grupp EEG1T ET Publishing EE % Hold 45 26% -1% 8% 4% -1% 20% 36 47% Grindeks GRD1R LR Pharmaceuticals LV % Buy 86 39% -2% -2% -1% -4% 13% 45 42% Grigiskes GRG1L LH Paper Products LT % -4% 4% 26% 7% 114% 15 33% Harju Elekter HAE1T ET Electrical Components & Equipm EE % Hold 54 43% -3% 7% 33% 6% 25% 8 36% Invalda IVL1L LH Home Furnishings LT % -2% 1% 21% -9% 95% 26 43% Klaipedos Nafta KNF1L LH Oil & Gas Storage & Transporta LT % -4% 4% -15% -15% 34% 5 31% Lietuvos Dujos LDJ1L LH Gas Utilities LT 0.79 Under Rev. Under Rev % 0% 12% 21% 8% 14% 15 25% LESTO LES1L LH Electric Utilities LT % -7% 4% Linas Agro Group LNA1L LH Agricultural Products LT % Hold 86 34% 0% 2% -2% -11% -18% 43 Latvian Shipping Company LSC1R LR Oil & Gas Storage & Transporta LV % -8% -2% -5% 3% -5% % Merko Ehitus MRK1T ET Construction & Engineering EE % Hold % 0% 5% 9% 2% 14% 36 31% Nordecon International NCN1T ET Construction & Engineering EE % Buy 41 37% -2% 5% -7% -4% -33% 27 43% Olympic Entertainment Group OEG1T ET Casinos & Gaming EE % Accumulate % 0% 13% 24% 3% 0% % Olainfarm OLF1R LR Pharmaceuticals LV % Buy 43 23% -2% 5% 19% -1% 115% 11 37% Premia Foods PRF1T ET Packaged Foods & Meats EE % Accumulate 33 34% -2% 3% -16% -9% 20 Pieno Zvaigzdes PZV1L LH Packaged Foods & Meats LT % -4% 5% 7% 5% 37% 5 45% Panevezio Statybos Trestas PTR1L LH Construction & Engineering LT % -1% 9% 13% -9% 31% 59 38% Rokishkio Suris RSU1L LH Packaged Foods & Meats LT % -3% 16% 12% -2% 65% 13 39% Siauliu Bankas SAB1L LH Diversified Banks LT % 5% 4% 3% -4% 0% 18 25% SAF Tehnika SAF1R LR Communications Equipment LV % 3% 17% -26% -11% 394% 9 78% Sanitas SAN1L LH Pharmaceuticals LT % 3% 11% 1% -3% 30% 21 30% Silvano Fashion Group SFGAT ET Apparel Retail EE % Accumulate % 0% 11% 28% 21% 122% % Snoras SRS1L LH Diversified Banks LT % 1% 13% 9% -12% 23% 47 41% Zemaitijos Pienas ZMP1L LH Packaged Foods & Meats LT % -1% 2% 19% -5% 28% 11 35% Tallink TAL1T ET Marine EE % Accumulate % -3% 4% 6% -3% 5% % TEO LT TEO1L LH Integrated Telecommunication S LT % Hold % -1% 3% 1% -5% 1% % Tallinna Kaubamaja TKM1T ET Department Stores EE % Reduce % -1% 5% 13% 6% 30% 96 32% Tallinna Vesi TVEAT ET Water Utilities EE % Hold % 0% 6% 23% 12% -18% 54 26% Ukio Bankas UKB1L LH Diversified Banks LT % 4% 13% -1% -16% -4% 97 32% Ventspils Nafta VNF1R LR Oil & Gas Storage & Transporta LV % 4% 7% -12% 1% -22% 2 83% AVERAGE 17% % -1% 6% 7% -2% 39% % MEDIAN 16% % -1% 5% 7% -3% 21% % Avg. Daily Turnover th 52w Volatility Equity Research Large Corporations & Institutions Page 6 of 9

7 Baltic Equity Fundamentals Bloomberg EV P/E P/E P/BV P/BV P/S P/S EV/ Name ticker meur P/E 2011F 2012F P/BV 2011F 2012 P/S 2011F 2012F EBITDA EV/ Sales ROE ROA DPS Apranga APG1L LH % 1% 1% 44% 1% 61% Arco Vara ARC1T ET % 2% 14% -41% 173% Baltika BLT1T ET % -15% 52% -9% 224% City Service CTS1L LH % 7% % 2% 2% 17% 4% 126% Ekspress Grupp EEG1T ET % -8% 21% -8% 138% Grindeks GRD1R LR % 9% 4% 54% 14% 44% Grigiskes GRG1L LH % 4% % 12% 5% 117% Harju Elekter HAE1T ET % 5% % 2% 3% 15% 4% 25% Invalda IVL1L LH % 7% 17% 169% Klaipedos Nafta KNF1L LH % 6% % 41% 24% 0% Lietuvos Dujos LDJ1L LH % 3% % 5% 0% 0% LESTO LES1L LH Linas Agro Group LNA1L LH % 4% % 2% 6% 2% 144% Latvian Shipping Company LSC1R LR % -14% 7% -11% 102% Merko Ehitus MRK1T ET % 1% % 1% 1% 7% 1% 57% Nordecon International NCN1T ET % -11% -1% -9% 196% Olympic Entertainment Group OEG1T ET % 1% 55% 3% 33% Olainfarm OLF1R LR % 11% 53% 18% 58% Premia Foods PRF1T ET % 2% 1% 2% 24% 4% 66% Pieno Zvaigzdes PZV1L LH % 6% % 19% 4% 77% Panevezio Statybos Trestas PTR1L LH % 7% % 16% Rokishkio Suris RSU1L LH % 7% % 14% 5% 31% Siauliu Bankas SAB1L LH % -2% -106% 99% SAF Tehnika SAF1R LR % 17% % 44% 20% 0% Sanitas SAN1L LH % 8% 56% 20% 51% Silvano Fashion Group SFGAT ET % 20% % 4% 5% 40% 19% 55% Snoras SRS1L LH % 0% -70% 140% Zemaitijos Pienas ZMP1L LH % 10% 21% 5% 18% Tallink TAL1T ET 1, % 2% 25% 15% 180% TEO LT TEO1L LH % 15% % 8% 46% 21% 11% Tallinna Kaubamaja TKM1T ET % 6% % 1% 1% 13% 5% 102% Tallinna Vesi TVEAT ET % 10% % 8% 60% 58% 161% Ukio Bankas UKB1L LH % -1% -28% 125% Ventspils Nafta VNF1R LR % -6% 24% 13% AVERAGE % 3% 0.2 4% 2% 4% 29% 0% 87% MEDIAN % 4% 0.1 2% 1% 3% 24% 4% 71% Div. Yield Div. Yield 2011F Div. Yield 2012F Gross margin Operating margin Debt to equity Equity Research Large Corporations & Institutions Page 7 of 9

8 Contacts: Head of Baltic Equity Research Pertti Rahnel Head of Baltic Equity Sales Andres Suimets andres.suimets@swedbank.ee Energy, Materials & Utilities Industrials Equity Sales Pertti Rahnel pertti.rahnel@swedbank.ee Risto Hunt risto.hunt@swedbank.ee Andres Suimets andres.suimets@swedbank.ee Head of Sales () Donatas Užkurėlis donatas.uzkurelis@swedbank.lt Lithuania Donatas Užkurėlis donatas.uzkurelis@swedbank.lt Lithuania Svetlana Skutelska Svetlana.skutelska@swedbank.lv Head of Sales (Latvia) Telecom Services Financials Simona Silevičiūtė simona.sileviciute@swedbank.lt Head of Sales (Lithuania) Donatas Užkurėlis donatas.uzkurelis@swedbank.lt Lithuania Risto Hunt risto.hunt@swedbank.ee Consumers & Retail Healthcare Equity Trading Risto Hunt risto.hunt@swedbank.ee Donatas Užkurėlis donatas.uzkurelis@swedbank.lt Pertti Rahnel pertti.rahnel@swedbank.ee Pertti Rahnel pertti.rahnel@swedbank.ee Latvia Simmo Sommer simmo.sommer@swedbank.ee Lithuania Equity Capital Markets Allan Marnot allan.marnot@swedbank.ee Head of Baltic Equity Trading Baltic Equity Capital Markets Swedbank Group Homepage: For Research products on Bloomberg please type: HBME <GO>. Background Information: Recommendation structure Large Corporations & Institutions recommendation structure consists of six recommendations: Buy, Accumulate, Hold, Reduce, Sell and Avoid. The recommendations are based on an absolute return for the security 12 months forward. The absolute return includes share price appreciation and dividend yield combined. The recommendations for the securities mentioned in this report are based on risk and return considerations. The higher the risk category of the investment, the higher the required return. For equity investments, returns are defined as capital appreciation and dividends received over the investment horizon of 12 months forward. The expected capital appreciation is the ratio of a stock s target price over the current price. A company risk rating depends on its stock price volatility, liquidity and business outlook. The target price depends on a company s fundamentals as well as the market valuation of peer stocks, and can be changed at any time if the relevant changes occur within a company/market perception of the peer group. Buy, accumulate, hold, reduce, sell and avoid recommendations may be used in this report. The table below presents the relationship between recommendations and target prices compared to risk level of the stock. These are indicative ranges and actual recommendations may deviate from the indications if other relevant issues are considered. For more detailed information about the recommendation system please visit Recommendation structure Buy > +20% to target price Accumulate +10% < target price < +20% Hold 0% < target price < +10% Reduce -10% < target price < 0% Sell < -10% to target price Avoid used when security does not match the standards presented in SWB s investment guidelines The recommendation by Large Corporations & Institutions Equity Research department is based on a variety of standard valuation models. However, the base for the calculation of the target price is our DCF model (DCF = discounted cash flow) with the exception of financial and investment companies. The DCF model discounts future cash flow at present value. In preparation of this report different valuation methods have been used, including, but not limited to, discounted free cash-flow and comparative analysis. The selection of methods depends on the industry, the company, the nature of the stock and other circumstances. The target price (previous fair value) takes into account the DCF value, the relative valuation of the share versus others peers (national or international) and news that can have a positive or negative effect on the share price. Relative and absolute multiples that we consider are: EV/EBITDA, EV/EBIT, PE, PEG and Net Asset models for companies with liquid markets for their assets and other industry specific ratios when available. Break-up valuation models are also sometimes considered. Recommendations by the 15 Apr 2011 No of shares Part of total Buy 7 37% Accumulate 6 32% Hold 2 11% Reduce 1 5% Under Review 3 16% Equity Research Large Corporations & Institutions Page 8 of 9

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