E S T R A V E L

A N N U A L R E P O R T 2 0 1 7

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CONTENT

ADDRESS BY MEMBERSOF THE MANAGEMENT BOARD 3

MANAGEMENT REPORT

FINANCIAL HIGHLIGHTS OF ESTRAVEL AS 5

SUMMARISED SALES OF ESTRAVEL GROUP 6

SALES BREAKDOWN BY PRODUCT 7

PACKAGE TOUR SALES BY OPERATOR 7

FERRY TICKET SALES BY CARRIER 7

SALES BY GEOGRAPHICAL AREAS 8

SALES BREAKDOWN BY CUSTOMER GROUP 9

FINANCIAL STATEMENT

BALANCE SHEET 10

INCOME STATEMENT 12

STATEMENT OF CASH FLOWS 13

RECEIVABLES AND PREPAYMENTS 15

PREPAID TAXES AND TAXES PAYABLE 16

OTHER RECEIVABLES 16

INVESTMENTS IN SUBSIDIARIES 17

PAYABLES AND ADVANCES RECEIVED 18

AUDIITORI OTSUS 19

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DEAR READER,

The frequency of people’s travel is very closely related to their standard of living and this

made 2017 a very busy year for Estravel – the number of business and holiday travellers

increased and we continued to expand into new markets.

More than 370,000 trips were arranged through Estravel in 2017, which means that we

sent an average of 1,000 clients a day off on trips and they visited a total of 183 countries

during the year. Estravel itself has also conquered new countries. In 2017, we purchased

two travel agencies: Preferred Travel Services LLC in Phoenix, Arizona in the U.S. and Helin

Matkatoimisto OY in Finland. Estravel is the first travel agency in the Baltic countries to

reach the U.S. market and our subsidiaries are now operating in six countries on three

continents. Estravel employs a total of 210 people in 16 travel agencies in Estonia, Latvia,

Lithuania, Finland, the U.S. and Australia, and it conducts business under 15 different

brand names.

The Estravel Group, which is 100% Estonian owned, continues to be the largest seller

of travel services in Estonia and the other Baltic countries, and the consolidated sales

revenues for last year totalled over €91 million. In 2017, the sales revenues of AS Estravel,

which operates primarily in the Estonian market, grew by 11.5% and exceeded

€70 million. The pre-tax profits were €1.342 million.

Airline tickets were our largest sales item last year and comprised over

half of Estravel’s total sales. Hotel accommodations were in second

place and the sale of package tours and cruises was in third.

Individual holiday travellers (44%) were the largest client

group, followed by businesses (37%) in second place,

and state and public sector organisations (17%) in third.

We started several new projects in 2017. In cooperation

with Rahva Raamat, we organised monthly travel

mornings, where people interested in travel and

experienced travellers could discuss different

destinations. At Tourest, the Estonian travel fair,

we held tourism-related seminars and participated

in a mini opinion festival. We also updated Estonia’s

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largest travel magazine, which is now called Traveller and appears twice a year and is

more comprehensive. CruiseCentre, Estravel’s cruise agency, established kruiis.ee, the

largest cruise portal in the Baltic countries, offering a choice of over 100 international

cruise companies. We used the cruise sales revenues to support the Estonian Cancer

Association. We also participated in many other charitable projects.

In the spring, the long-term CEO of Estravel received the European Travel Award from

HOTREC, the umbrella association of hotels, restaurants, pubs, cafes and similar estab-

lishments in Europe, which was acknowledgement of the entire Estravel team. However,

even more important for us is the assessment of the young people entering the labour

market, who, according to a study conducted by Instar EBC, consider Estravel to be

one of the 50 most attractive employers in Estonia.

In 2018, Lonely Planet, the world’s largest travel guidebook, named Tallinn as its best

value destination for the year. The increased interest on the part of foreign tourists

is based on low airfares as well as economic forecasts indicating that Tallinn Airport

will set a new record for the number of tourists travelling through it in 2018. Estravel is

also working every day to provide valuable advice and 24-hour travel services to both

Estonians departing on trips and tourists from other countries that are visiting us. In

addition to our daily work, we are preparing to celebrate Estravel’s 30th anniversary

in August 2018.

LOOKING FORWARD TO NEW TRAVELS!

Anne Samlik and Aivo Takis, Members of the Estravel Management Board

Anne Samlik

Aivo Takis

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FINANCIAL HIGHLIGHTS OF ESTRAVEL AS(in millions of euros)

2017

revenue

pretax profit

profit margin (from net revenues)

share capital

shareholders` equity

return on assets

return on equity

solvency

70.28

1.9%

0.2

3.6

10.1%

37.4%

1.2

2016

revenue

pretax profit

profit margin (from net revenues)

share capital

shareholders` equity

return on assets

return on equity

solvency

62.99

1.566

2.5%

0.2

2.3

12.7%

68.7%

1.4

1.342

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SUMMARISED SALES OF ESTRAVEL GROUP

AS Estravel group companies Sales (eur) Internal sales (eur) AS Estravel group companies total sales

Estravel AS (Estonia) 64 677 533 299 003 64 378 530

Estravel AS (Latvia, dba. FTB Latvia) 5 835 047 140 195 5 694 852

Estravel Vilnius 13 967 131 122 104 13 845 027

Helin Matkatoimisto Oy 4 079 456 300 4 079 156

Estintour OÜ 453 243 91 621 361 622

Aero Travel Pty Ltd 2 036 653 109 611 1 927 042

Preferred Travel Services LLC 54 461 630 53 831

Total 91 103 524 763 464 90 340 060

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Lennuk

Airline tickets

Hotel accommodation

Package tours & cruises

Ferry tickets

Other services

Bus & and car rental

Insurance

Rail tickets

Visas

51.8%

34.6%

35.6%

30.1%

29.4%

2.9%

2%

27.4%

19.0%

11.3%

2.4%

2.0%

0.7%

2.6%

16.1%

15.7%

8.6%

4.9%

1.3%

0.9%

0.4%

0.3%

Novatours

Tez Tour

Aurinko

Aurinkomatkat

Finnmatkat

TUI Reisecenter

Germalo Reisid

Others

Viking Line

Tallink

Eckerö Line

Lindaliini

Others

SALES BREAKDOWNBY PRODUCT

PACKAGE TOUR SALESBY OPERATOR

FERRY TICKET SALESBY CARRIER

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SALES BY GEOGRAPHICAL AREAS

Destination country in sales order Share %

Europe (excl Estonia, Latvia, Finland, Russia, Lithuania) 48.4

Estonia 15.4

Asia 10.8

North-America and Caribbean 7.9

Finland 7.0

Africa 3.2

Latvia 2.0

Russia 1.9

Lithuania 1.4

Australia, New-Zealand, Pacific islands 1.2

South-America 0.8

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Business

Private persons

Government & non-profit

Resellers abroad

Resellers in Estonia

37%

44%

17%

201741%

39%

16%

2016

SALES BREAKDOWN BY CUSTOMER GROUP

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BALANCE SHEET(in euros)

Assets 31.12.17 31.12.16

Current assets

Cash 3 497 673 4 518 699

Financial assets 1 736 000 1 736 000

Receivables and prepayments 3 669 830 3 191 339

Inventories 5 835 10 579

Total current assets 8 909 338 9 456 617

Non-current assets

Investments in daughter companies 1 093 737 206 018

Financial assets 543 025 493 000

Property, plant and equipment 147 394 93 655

Intangible assets 2 446 664 2 033 576

Total non-current assets 4 230 820 2 826 249

Total assets 13 140 158 12 282 866

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Liabilities and equity 31.12.17 31.12.16

Liabilities

Short-term liabilities

Loans 552 746 545 207

Payables and customer prepayments 6 787 852 6 372 950

Total current liabilities 7 340 598 6 918 157

Long-term liabilities

Loans 2 237 899 3 087 646

Total long-term liabilities 2 237 899 3 087 646

Total liabilities 9 578 497 10 005 803

Equity

Share capital at par value 189 000 189 000

Share premium 28 792 28 792

Statutory capital reserve 19 174 19 174

Retained earnings (prior periods) 1 993 803 476 273

Profit for the period 1 330 892 1 563 824

Total equity 3 561 661 2 277 063

Total liabilities and equity 13 140 158 12 282 866

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INCOME STATEMENT(In euros)

2017 2016

Revenue 70 277 595 62 987 785

Other income 34 241 28 845

Raw materials and services used -63 048 466 -55 989 484

Other operating expenses -1 836 386 -1 480 063

Personnel expenses -4 017 330 -3 707 056

Depreciation, amortisation and impairment losses -303 143 -257 741

Other expenses -82 981 -83 975

Operating profit 1 023 530 1 498 311

Financial income and expenses 318 936 67 516

Profit before tax 1 342 466 1 565 827

Income tax expense -11 574 -2 003

Profit for the year 1 330 892 1 563 824

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STATEMENT OF CASH FLOWS(In euros)

Cash flows from operating activities 2017 2016

Operating profit 1 023 530 1 498 311

Adjustments for

Depreciation, amortisation and impairment losses 303 143 257 741

Gain/ loss on sale of property, plant and equipment -12 917 -5 833

Other adjustments 2 740 2 856

Total adjustments 292 966 254 764

Change in receivables and prepayments -321 072 -915 382

Change in inventories 4 744 -492

Change in payables and advances received 412 162 -294 081

Interest paid -38 262 -48 045

Corporate income tax paid -11 574 -2 003

Net cash used in operating activities 1 362 494 493 072

Cash flows from investing activities 2017 2016

Acquisition of property, plant and equipment and intangible assets -95 330 -83 267

Proceeds from sale of property, plant and equipment and intangible assets 12 917 5 833

Acquisition of daughter companies -1 342 034 -54 996

Acquisition of other financial assets -106 025 -779 000

Proceeds from sale of other financial assets 256 000 0

Loans granted -223 616 -1 500

Repayment of loans granted 66 196 102 638

Interest received 139 264 91 308

Other cash outflows from investing activities -200 000 0

Other proceeds from investing activities 2 692 292 555

Net cash from investing activities -1 489 936 -426 429

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Cash flows from financing activities 2017 2016

Loans received 0 35 000

Repayments of loans received -842 208 -387 147

Dividends paid -46 294 -8 010

Net cash used in financing activities -888 502 -360 157

Net cash flow -1 015 944 -293 514

Cash and cash equivalents at beginning of period 4 518 699 4 811 047

Change in cash and cash equivalents -1 015 944 -293 514

Effect of exchange rate fluctuations on cash held -5 082 1 166

Cash and cash equivalents at end of period 3 497 673 4 518 699

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RECEIVABLES AND PREPAYMENTS(In euros)

31.12.17 31.12.16

Trade receivables 1 810 987 1 715 347

Prepaid and refundable taxes 5 008 0

Other receivables 919 090 590 850

Prepayments 934 746 885 141

Total receivables and prepayments 3 669 831 3 191 338

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PREPAID TAXES AND TAXES PAYABLE(In euros)

OTHER RECEIVABLES(In euros)

31.12.17 31.12.16

Payable Prepayment Payable Prepayment

Value added tax 20 334 8 30 243 0

Personal income tax 83 889 0 80 477 0

Corporate income tax 1 299 5 000 8 503 0

Finge-benefits tax 2 957 0 0

Social tax 168 909 0 161 987 0

Mandatory funded pension contributions 9 593 0 9 014 0

Unemployment insurance contributions 10 890 0 10 112 0

Total 297 871 5 008 300 336 0

31.12.17 31.12.16

Loan receivables 223 616 66 197

Interest receivable 0 797

Accrued items 468 334 467 228

Other receivables 227 140 56 628

Total other receivables 919 090 590 850

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Name of subsidiary Domicile Core activity Shareholding (%)

31.12.17 31.12.16

Estravel Vilnius UAB Lithuania travel services 100 100

Aero Travel Pty Ltd Australia travel services 100 100

Estintour OÜ Estonia travel services 100 100

Preferred Travel Services LLC USA travel services 100 0

Helin Matkatoimisto Oy Finland travel services 100 0

INVESTMENTS IN SUBSIDIARIES

INVESTMENTS IN SUBSIDIARIES, GENERAL INFORMATION(In euros)

DETAILED INFORMATION(In euros)

Name of subsidiary 31.12.16Purchase price

of the acquired sharesProfit/ loss

under the equity method31.12.17

Estravel Vilnius UAB 146 247 0 35 072 181 319

Aero Travel Pty Ltd 41 881 0 -1 605 40 276

Estintour OÜ 17 890 0 355 18 245

Preferred Travel Services LLC 0 42 034 -42 034 0

Helin Matkatoimisto Oy 0 635360* 218 537 853 897

The exceeding equity value of the purchase price was recognised as goodwill.

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PAYABLES AND ADVANCES RECEIVED(In euros)

31.12.17 31.12.16

Trade payables 996 317 909 658

Payables to employees 311 514 317 658

Taxes payable 297 871 300 336

Other payables 604 462 593 362

Advances received 4 577 689 4 251 936

Total payables and advances received 6 787 853 6 372 950