SanomaWSOY's net sales during the first nine months of 2000 totalled EUR 1,037.7 million (EUR 939.5 million), up 10.5% on 1999. The Group's profit before extraordinary items totalled EUR 112.9 million (EUR 80.4 million), up 40.3%. Earnings per share were EUR 0.56 (EUR 0.40). Net financial income was reduced by write-downs and a change in booking practice. Equity per share was EUR 5.85 (EUR 5.52), an increase of 5.9%.

OUTLOOK FOR THE FUTURE

Projections indicate that the growth of Finland's GDP will slow next year. Consumers' interest in making major purchases and potential to do so inevitably declines as economic uncertainty grows. This scenario is favourable to SanomaWSOY, as a consumer focus on smaller purchases is generally reflected in stronger demand for consumer communications and media products.

SanomaWSOY's net sales and profitability have both developed favourably over the first nine months of the year, and this trend is projected to continue. We forecast that the Group's net sales for the full year will increase by 10% compared to 1999, to some FIM 8,600 million. Despite the negative impact on the Group's result of costs associated with developing new businesses and of costs and depreciation associated with acquisitions during the development and acquisition stage, we expect SanomaWSOY's operating profit for 2000 to be clearly better than in 1999 and total some FIM 500 million. The Group's result before extraordinary items is also expected to be clearly better than last year.

SanomaWSOY's strategic goal is to double its net sales by 2005 and significantly increase its operating profit. The Group's operational objective is to achieve an annual growth in net sales of at least 10%, through organic growth, international expansion, new business development, and acquisitions.

SanomaWSOY is the clear leader in classic media in Finland and future growth in this area will be driven primarily by developments around the Baltic Rim. Reflecting this, the aim is for at least 20% of net sales in classic media to come from outside Finland within three years.

The Group's new media strategy is based on four key platforms: fixed and mobile networks, cable-TV, and digital-TV. These activities are now grouped within the Group's new electronic media sector, SWelcom. This realignment will further strengthen our potential to implement our overall strategy and grow net sales in the new media area. Our key goal in developing new businesses and expanding internationally is to create the appropriate infrastructure and achieve market leadership in selected business segments.

THE EURO AND FINANCIAL REPORTING DURING 2001

SanomaWSOY Corporation will adopt the Euro as its internal currency as of January 1, 2001. The financial statements for 2000 will be denominated in Finmarks converted into Euros. Beginning with the 2001 financial year, financial information will be provided solely in Euros. The figures for 2000 will be published on February 28.

SANOMAWSOY

During the first nine months of 2000, the SanomaWSOY Group consisted of four sectors: Helsinki Media, Sanoma, WSOY, and Rautakirja, a listed company on the HEX Helsinki Exchanges in which SanomaWSOY has a 54.7% holding. The Group's new electronic media sector, SWelcom, and Helsinki Media, reorganised as a dedicated magazine publisher, began operations as of July 1, 2000 and as separate legal entities on October 1, 2000, from which date their businesses will be reported separately.

While the text of this report focuses on the first nine months of the year as a whole, the figures contained in the main tables are presented on a quarterly basis.

NET SALES

SanomaWSOY's net sales between January and September totalled FIM 6,169.9 million (1999: FIM 5,586.1 million). Net sales rose by some 11% over the equivalent period last year. All of the Group's sectors recorded increased sales; the largest growth was seen at Helsinki Media and Rautakirja. Acquisitions made by WSOY, in the shape of Docendo, and by Rautakirja, in the shape of Veikkausrasti in Finland and additional kiosks in Estonia, also contributed to higher net sales. Comparable net sales for the Group as a whole, accounting for the impact of acquisitions and divestments, rose by nearly 8%.

RESULT

SanomaWSOY recorded a profit before extraordinary items of FIM 671.0 million (FIM 478.3 million), up some 40% on 1999. Asset management activities turned in a good result, allthough it was reduced by write-downs and a change in booking practice. Depreciation rose to FIM 357.7 million (FIM 311.2 million), an increase of 15%, while R&D expenses, booked as costs, rose to over FIM 110 million (approx. FIM 40 million). The Group's operating profit increased 29% to FIM 362.6 million (FIM 282.2 million). All of the Group's sectors recorded an improved performance, with the exception of WSOY, where performance remained at 1999 levels. Earnings per share rose to FIM 3.33 (FIM 2.38).

MARKET DEVELOPMENTS

The Finnish economy continued to grow during the summer and early autumn. Forecasts indicate that GDP over the year as a whole will rise by nearly 6%. During the first part of the year, the retail sector grew more than initially projected, and full-year growth is projected to be a little under 5%. Increases in paper prices forecast to take effect in the near future will put cost pressures on the media sector.

Advertising expenditure in Finland rose strongly during the first nine months, in the case of media expenditure by a little over 7%. All categories showed growth, with the exception of cinema advertising. Newspapers further strengthened their position as the country's key advertising media, and their advertising revenue rose by some 8%. Magazine advertising increased by nearly 8%, and TV advertising by a little under 4%. The largest absolute growth was seen in Web-based advertising, up 55%, although it continues to be the second-smallest advertising category, cinema advertising being the smallest.

Media advertising is expected to continue growing into 2001. Advertising expenditure in Europe is projected to be nearly 8% higher than this year, and slightly higher in Finland, at over 9%. This projection is supported by the latest barometer poll on future advertising expenditure taken in Finland, which indicates that companies intend increasing their expenditure next year.

KEY EVENTS

SanomaWSOY's new sectors - electronic media specialist SWelcom and Helsinki Media, which now concentrates solely on magazine publishing - began operations as of the beginning of July, and as separate legal entities on October 1. The TV and other electronic media activities previously grouped under Helsinki Media, together with SanomaWSOY's electronic media projects, have been brought together under the SWelcom umbrella.

Swwap Oy's 2ndhead open mobile portal went live in June. Version 1.0 of the portal includes news, sports results, share price information, and navigation and street finder services.

In August, Helsinki Media increased its holding in Channel Four Finland to 86.02% by acquiring Egmont Holding Oy's 25.01% stake in the company. The remaining 13.98% is held by TS-Yhtymä Oy.

Sanoma Corporation took a strategic decision in September to buy a new-generation four-colour printing production line for its Sanoma facility in Greater Helsinki. The project is valued at some FIM 225 million and forms part of Sanoma's FIM 456 million investment programme announced in February.

WSOY acquired Tamro's 80.1% holding in Karttakeskus Oy in September. Karttakeskus and WSOY's Geodata Oy subsidiary will be merged in the early part of next year. The main focus of the merged company will be on mobile and Internet-based location solutions.

Deputy President Eija Ailasmaa of the former Helsinki Media was appointed President of the new Helsinki Media as of July 1, and Tapio Kallioja, President of the former Helsinki Media, President of SWelcom as of the same date.

WSOY President and SanomaWSOY Deputy President & CEO, Antero Siljola, announced his resignation on July 18 from the Boards of Directors of SanomaWSOY, Rautakirja Oyj, and the Group's subsidiaries. SanomaWSOY's Board of Directors appointed Jorma Kaimio, previously WSOY's Literary Director and Deputy President, as his successor as President of WSOY in September.

BALANCE SHEET

The Group's consolidated balance sheet at the end of September totalled FIM 8,497.7 million (FIM 7,608.5 million), an increase of nearly 12%. Consolidated shareholders' equity rose to FIM 4,808.3 million (FIM 4,539.5 million). The Group's equity ratio stood at 67.8% (71.2%), and equity per share at FIM 34.75 (FIM 32.82).

INVESTMENTS

The Group's gross investments totalled FIM 702.9 million (FIM 1,196.1 million). The largest single investment was Helsinki Media's acquisition of Egmont Holding Oy's holding in Channel Four. The Group's other major investments were focused on WSOY's acquisition of Docendo Läromedel and Sanoma's modernisation of its printing facilities and share purchases. As part of the latter, Sanoma acquired a majority holding in Uutisvuoksi, a local paper published in south-east Finland, and a 10.4% holding in the voting rights of shares in Top Press, the owner of Esan Kirjapaino Oy. SanomaWSOY also increased its holding in A-pressen of Norway, and the Group's holding as of September 30 stands at 29.6%.

FINANCING

The Group's financial position is strong. The book value of financial asset securities, cash, and bank at the end of September totalled FIM 1,895.1 million (FIM 2,090.3 million), and their market value, FIM 2,311.0 million. The book value of long-term investments booked as non-current assets totalled FIM 1,658.4 million (FIM 1,354.0 million). Interest-bearing liabilities totalled FIM 995.0 million (FIM 481.2 million).

Net financial income during the third quarter was reduced by FIM 35.5 million as a result of depreciation booked against securities. A change in booking practice when consolidating the Group's Swiss subsidiary reduced financial income in 2000 by FIM 21.7 million compared to the previously reported figure.

SHARES

SanomaWSOY's Annual General Meeting (AGM) in the spring decided to increase the number of Company shares through a four-for-one share split, which came into force on May 10. Following this and the conversion of a number of Series A shares into Series B shares by the Company's largest owners in April, the number of Series A shares now totals 23,220,492 and the number of Series B shares 122,301,104. Through its Tiikerijakelu Oy subsidiary, the Group holds 7,187,276 Series B shares. The number of Series A and B shares on the market totals 138,334,320.

A total of 86,139 Series A shares and 1,892,957 Series B shares were traded during the first nine months of the year at an average price, after adjustment for the share split, of EUR 18.36 and EUR 17.17 respectively. The highest price paid for Series A shares after the same adjustment was EUR 24.37 and the lowest EUR 13.00; the highest price paid for Series B shares was EUR 23.75 and the lowest EUR 12.28. Total share turnover was EUR 239.1 million.

SanomaWSOY's market value as of the end of September, minus Company shares held by the Group, stood at EUR 2,273.7 million (EUR 1,638.3 million) or FIM 13,518.9 million (FIM 9,740.8 million).

PERSONNEL

The average number of people employed by the Group's various companies between January and September totalled 13,340 (12,601). Converted into full-time positions, this was equivalent to 10,287 (9,745).

HELSINKI MEDIA

Magazine publishing and electronic media

The new Helsinki Media, focused on magazine publishing, and SWelcom, focused on electronic media, began life as separate legal entities after the period under review, on October 1. This interim report has been prepared in accordance with the legal structure in force as of September 30, and the figures given for Helsinki Media cover only those electronic media activities previously grouped under the Helsinki Media umbrella. Swwap Oy's 2ndhead portal and the Virtual Portal project, which were previously Parent Company activities before being transferred to SWelcom, are reported in the consolidated figures under 'other companies'.

Net sales for the pre-October 1 Helsinki Media Group between January and September totalled FIM 989.3 million (FIM 849.8 million), an increase of some 16% on 1999. Comparable growth, allowing for the transfer of Tuotantotalo Werne to Helsinki Media on May 1, 1999, was 14%.

The sector's operating loss was more than halved compared to 1999, mainly as a result of improved profitability at Channel Four Finland. The sector's loss for the first nine months totalled FIM 30.7 million (70.8 million).

Helsinki Media's total investments stood at FIM 156.9 million (FIM 186.5 million). The bulk of investments were allocated to electronic media.

Magazine publishing

Net sales in the magazine publishing area increased by 7% between January and September and totalled FIM 665.9 million (FIM 622.8 million). Magazine subscription revenue, non-subscription sales, and advertising sales all developed positively. Sales of advertising space in Helsinki Media titles increased by nearly three times the market average. Book sales also increased.

Magazine publishing-related net sales increased by 31% to FIM 40.6 million (FIM 31.0 million), driven by improvements in profitability and by Hansaprint, the sector's associated printing company.

Magazine publishing-related investments totalled FIM 16.6 million (FIM 82.3 million), and were mainly focused on computer and software purchases.

The new titles launched in 1999 continued to develop positively. Cosmopolitan's circulation continued to grow rapidly, and currently stands at 50,000 copies per issue on an annualised basis. The IT magazine, ITviikko, and the men's lifestyle magazine, MG, both recorded increased advertising sales. The multi-product concept incorporated in the Sister's Club book club for young girls has been well received by the club's target audience.

Extensive development work on a virtual community for children and young people as part of the Virtual Portal project resulted in the launch of Tasku, an interface targeted to the youth audience, as part of the Web presence of the Sister's Club and Merkurius clubs.

Net sales and operating profit for Helsinki Media in its new format as a magazine publisher is projected to develop positively compared to 1999. Net sales are expected to rise by some 8%, as a result of good advertising sales and new titles. Net sales are expected to exceed FIM 900 million, and operating profit is expected to improve. Helsinki Media's goal is to expand its international presence significantly over the next few years.

Electronic media

Net sales of the electronic media activities that formed part of Helsinki Media prior to the formation of SWelcom (Channel Four, HTV, Tuotantotalo Werne, and Måndag) rose by 42% over the first three quarters of the year, to FIM 323.4 million (FIM 227.8 million). Comparable growth, allowing for the transfer of Tuotantotalo Werne to Helsinki Media on May 1, 1999, was 34%. The largest single contributor to this growth was made by Channel Four. The latter's share of the Finnish TV advertising market has continued to grow and its national viewing share also continues to rise.

The operating loss of electronic media-related activities fell to FIM 64.7 million (FIM 99.4 million), primarily as a result of improved profitability at Channel Four.

Electronic media-related investments totalled FIM 140.3 million (FIM 104.2 million). The largest single investment was the purchase of Egmont Holding Oy's 25.01% holding in Oy Ruutunelonen Ab, Channel Four's parent company, in August, which increased Helsinki Media's holding to 86.02%. Investments were also made in Helsinki Television's (HTV) cable network and cable modems, and in equipment for Tuotantotalo Werne.

As of the end of September, 207,600 households were connected to the HTV network, of which 165,300 were digital connections. The HTV network will be virtually completely digital and duplexed by the beginning of 2001. The broadband capabilities of the network have made it possible to extend Internet services, and 7,000 cable modem customers were connected as of the end of September.

Preparatory work for the launch of digital broadcasting in autumn 2001 is being focused through Channel Four, SWelcom's new digital movie channel currently under development, and the sector's sports TV associated company, Suomen Urheilutelevisio.

Swwap launched its 2ndhead mobile portal in June. Marketing of the portal began at the end of August, after which the number of users rose rapidly, reaching some 30,000 at the end of October. Swwap's business is expected to grow strongly during 2001 as new content services provided by 2ndhead's partners come on line and with the spread of GPRS network technology and new WAP- and GPRS-based mobile phones.

Net sales for SWelcom, which includes not only Helsinki Media's electronic media activities but also SanomaWSOY's 2ndhead mobile portal and Virtual Portal project transferred at the beginning of October, are projected to be in the order of FIM 460 million for 2000 as a whole. Full-year net sales at Channel Four are projected to see a year-on-year growth of around 50%, and the channel's result is also expected to improve significantly compared to 1999. Channel Four's good performance will compensate for the costs associated with developing SWelcom's new businesses. SWelcom's pro forma loss for 2000 is projected to be in the order of FIM 100 million.

SANOMA

Newspaper publishing and printing, business information, and new media

Net sales at the Sanoma Group during the first nine months of the year rose 6% to FIM 2,011.1 million (FIM 1,895.9 million), driven in particular by good advertising sales at Helsingin Sanomat. Positive developments at Taloussanomat, the Startel News Agency, and Esmerk also contributed.

The positive development seen in advertising sales was also reflected in Sanoma's operating profit, which rose 14% to FIM 253.6 million (FIM 222.4 million). Rautakirja accounted for FIM 24.9 million (FIM 21.3 million) of the operating profit total.

Sanoma's gross investments totalled FIM 262.9 million (FIM 718.5 million). This figure included printing-related investments covering the expansion of four-colour capacity, purchases of shares in other media companies, and the purchase of Kymen Lehtimedia's production premises. In May, Sanoma acquired a 10.4% holding in the voting rights of shares in Top Press, the owner of Esan Kirjapaino Oy, to whom Kymen Lehtimedia sold two local papers. Kymen Lehtimedia also acquired a majority holding in Uutisvuoksi, a local paper in the Imatra area.

Part of investments went on modernising postal facilities at the Sanomala facility and two printing machines. The latter investment, decided on in February, forms part of a larger programme to be completed by 2003 and designed to completely modernise all of the production processes at the Sanomala facility. In September, Sanoma signed an agreement to purchase a new-generation printing line from Man Roland Druckmaschine AG. This project is of major strategic significance for Sanoma as it will offer new levels of flexibility, quality, and speed, including the ability to use high-quality four-colour reproduction on every page, thereby opening up valuable new publishing opportunities.

In September, Sanoma strengthened its position in the online car sales business by taking a 20% holding in Netwheels Oy, a database services company. The car sales business is expected to rely on services of the Netwheels type to an increasing extent in the future.

Net sales and operating profit at Helsingin Sanomat continued to grow during the summer and early autumn, at a slightly faster pace than during the first part of the year. Net advertising sales continued to grow more rapidly than the market generally, and Helsingin Sanomat's position as Finland's largest advertising medium was further strengthened. Job-related advertising, in particular, increased significantly. The slight drop in circulation (1 - 2%) seen in the first half continued in the third quarter, following the decision to reduce the number of short-term subscription offers made to potential readers. The benefit of measures taken to implement the paper's new focus on customer loyalty will take some time to impact circulation. As part of the revamp introduced in the paper's marketing, a major update of circulation-related operating models and organisation was started in the spring emphasising customer relationship management alongside efficiency.

Net sales at Ilta-Sanomat rose slightly as a result of increased advertising revenue. Operating profit fell slightly, however. Tabloid advertising has not developed as expected, and the emergence of free sheets has cut into tabloid sales, particularly in Greater Helsinki. Ilta-Sanomat nevertheless succeeded in increasing its market share during the third quarter. The partial transfer of printing to Kaleva Kustannus Oy in Oulu increased sales in northern Finland, as expected.

Ilta-Sanomat's online service, which was completely updated in September, has grown strongly. As of the end of the period under review, the service attracted over 90,000 visitors a week, up nearly 20,000 on the start of the year. The print edition switched to a completely four-colour format in October, which is expected to further strengthen the paper's competitiveness.

Net sales and operating profit at Kymen Lehtimedia both dropped, largely as a result of the fall-off in print sales volumes to the Russian market that had been projected. Combined circulation for the group's papers remained at 1999 levels. Net advertising revenue increased less than the market average, partly as a result of changes in the pricing of national advertising packages and partly as a result of local and regional competition. Circulation figures fell slightly, reflecting the downward population trend and higher-than-average unemployment typical of south-east Finland.

Net sales at Financial and New Media Products continued to grow strongly, and the unit's relative profitability improved. Growth was driven by the increase recorded in advertising and circulation revenue at Taloussanomat, the Startel News Agency, and new businesses. The unit's operating loss was slightly lower than that during the equivalent period in 1999, despite higher news acquisition costs at Startel.

In November, after the period under review, Taloussanomat's circulation increased by 7,000 following a decision by the Finnish Shareholders' Association to select Taloussanomat as its house paper. Taloussanomat's weekday circulation rose as a result to 33,000, and its Saturday circulation to over 40,000.

A number of investments in Esmerk's news monitoring coverage service have been made during 2000 and these are expected to have a positive impact on the company's result next year. In April, Esmerk signed a cooperative agreement with Siste Nytt Gruppen of Norway and set up a new subsidiary in Miami to improve its coverage in Norway and Central and South America. In October, Esmerk extended its presence in Russia by opening a representative office in Moscow; the company's service in Russia and the CIS covers over 150 daily, business, and trade publications.

Ecovision AB's listing on Stockholm's Aragon List took place in June, and, following a share issue, Startel's holding in the company fell to 33.4%. In July, Onbusiness Oy, jointly owned by Startel and Oy Radiolinja Ab, launched an SMS-based share price and news service; and in July, Startel associate company Suomen Nettirahastot Oy opened an Internet-based electronic marketplace. Marketing of the latter service began in October.

Sanoma's full-year net sales are expected to increase by some 6% over 1999, and the group's operating profit by considerably more. This projected increase in net sales is based primarily on the continued growth of advertising revenue at Helsingin Sanomat and in Financial and New Media Products. The growth in operating profit will be driven mainly by continued good advertising revenue development. Kymen Lehtimedia's print exports for the full year are expected to be below 1999; and export prospects looking further ahead will be dependent to a decisive extent on the recovery of the Russian economy.

WSOY Publishing, printing, and calendars

Net sales at the WSOY Group totalled FIM 821.1 million (FIM 789.1 million). Comparable net sales, accounting for the impact of acquisitions and divestments, rose FIM 32 million or some 4%.

Operating profit, at FIM 83.2 million (FIM 83.6 million), remained at 1999 levels. Performance within the traditional book publishing and printing areas improved, while investments in digital products had a downward impact on overall profits. WSOY's associated company, Rautakirja, contributed FIM 32.5 million (FIM 27.8 million) to the group's operating profit.

WSOY's gross investments totalled FIM 134.5 million (FIM 84.7 million), of which acquisitions accounted for FIM 91.8 million. The largest single investments were the acquisition of the Swedish-based IT publisher and IT learning solutions specialist, Docendo Läromedel AB, in March, and the acquisition of an 80.1% holding in Finland's largest map company, Karttakeskus Oy, in September.

WSOY's Publishing Division was reorganised in September. A new literary director was appointed to head General Literature, and the latter's New Media unit was combined with e-learning activities to create eWSOY. In October, Finland's leading publishers joined forces to create a new, jointly owned paperback publisher, which will begin operations at the beginning of 2001.

The general literature market continued to develop positively. WSOY's sales to bookshops as of the end of September were 18% up on the same period last year. The largest growth was seen in Finnish fiction, children's books, dictionaries, and business publications. On the important book club market, WSOY's book clubs increased their market share. Finland's first Internet book club, Bookmark, launched at the beginning of this year, failed to meet its membership target and development of its operating model is being continued.

Sales of educational materials rose by over 2%, and WSOY retained its strong market position. Orders for Weilin+Göös' reference and multi-volume publications increased slightly compared to 1999. Sales at Bertmark AB, a publisher of annual publications, also increased.

Design work on an Internet-based learning environment by eWSOY progressed, and a pilot version of its open learning portal was launched in selected schools. WSOY's holding in Young Digital Poland AS was increased to 29%, and the intention is to increase this holding further and develop more extensive cooperation between WSOY and the Polish company.

In Special Publishing, the emphasis of activities was on e-learning tools, e-training, and location and navigation-based solutions. The Simultan Open IT interactive teaching package was further developed by the Docendo Group, formed by the merger of Docendo Ab and Teknolit Oy. A new version of the product tailored to the Finnish market will be launched at the end of this year, and marketing of international versions will begin next year. The general slow-down in growth in the IT field had a negative impact on the Docendo Group.

Integration of Karttakeskus Oy, acquired in September, has started. Under an agreement with the company's minority shareholder, US-based MapInfo Corporation, Karttakeskus will be merged with WSOY subsidiary Geodata Oy. Legally, the merger is scheduled to take place on April 1, 2001, but, operationally, the two companies will be combined by the end of this year. The new company will be well-placed to succeed on the market for mobile and Internet-based location and navigation-related services. MapInfo Corporation will continue as an important partner.

WS Bookwell, the separate company formed at the beginning of April on the basis of what used to be the WSOY Printing Unit, recorded a good result, thanks to a growing book printing market. Tougher competition saw commercial printer Lönnberg Painot Oy record a slightly weaker performance, however. The order-book at digital printing specialist, Tummavuoren Kirjapaino Oy, remained good and the company recorded a satisfactory result.

Progress on turning around performance at Norwegian calendar company Emil Moestue and enhancing operations at Swedish-based Chrono AB progressed according to plan. Weak markets and reorganisation costs will have a negative impact on both companies' result for the full year. Profitability at Calendar Operations as a whole, which also includes Finnish-based Ajasto, is expected to show a clear improvement on last year, but a slight loss could be recorded as a result of the situation in Norway and Sweden.

WSOY's full-year net sales are projected to be some 10% above 1999 as a result of acquisitions made to date. The group's operating profit is expected to remain at 1999 levels, as a result of increased development-related investments.

RAUTAKIRJA

Kiosk-based retailing, newspaper and magazine distribution, bookshops, cinemas, restaurants, and e-business

Rautakirja's net sales rose by some 13% during the first nine months of the year, to FIM 2,769.0 million (FIM 2,457.3 million). All of the group's businesses increased their net sales, with kiosk-based retailing and newspaper and magazine distribution responsible for the largest growth. Eliminating the impact of new businesses, comparable net sales rose by 8.5%.

The group's higher net sales were also reflected in its operating profit, which rose 20% over 1999 to FIM 141.6 million (FIM 117.9 million). All of the group's businesses recorded an improved comparable result, with the exception of restaurant activities, where performance was held back by the integration of new outlets and marketing and concept development costs associated with the Pizza Hut chain. In contrast to previous years, performance-related bonus payments made to personnel have been split across the year, rather than being booked as a single item in December, as last year.

Rautakirja's profit before extraordinary items totalled FIM 153.7 million (FIM 133.2 million), an increase of more than 15% on last year. The good performance of treasury and asset management activities during the first half of the year levelled off in August and September, in line with the general downturn in stock prices. Net financial income totalled FIM 15.7 million, compared to FIM 17.3 million last year. Earnings per share rose to FIM 16.63 (FIM 14.32).

Investments totalled FIM 116.7 million (FIM 161.2 million). The largest investments were the multiplex cinema project under construction in Tallinn and the increase in Rautakirja's holding in Jokerit Oyj from 21% to 34.5% effected in September. The Tallinn multiplex was topped out in October and the centre will be opened in spring 2001. The project's total costs amount to some EEK 170 million (FIM 65 million).

In May, Rautakirja subsidiary Eurostrada Oy and Neste Markkinointi Oy agreed the phased transfer of the latter's chain of Motorest highway service areas to Eurostrada. The first two outlets were transferred to Foodstop Oy, a 99%-owned subsidiary of Eurostrada, at the beginning of June. Reorganisation measures have been started at the loss-making Pizza Hut chain to secure a clear improvement in profitability.

In August, Rautakirja's Estonian-based distribution company Lehti-Maja Eesti AB acquired a 90% holding in the Estonian company AS Megapannus, which has a licence to operate variable odds betting activities in Estonia.

In the summer, Rautakirja decided to bring together all its online business activities into a new e-business unit, which became a separate company, known as Ferete Oy, in October. Ferete's business offering will cover gaming, magazines and books, films, and other forms of entertainment. In August, Rautakirja became sole owner of the Veikkausrasti chain of betting shops; the chain will continue to operate as a separate entity and had 53 outlets as of the end of September.

In October, Rautakirja took a 30% stake in JHC Arena Holding, a sports and leisure hall project company. The company's first project will be the construction of a multi-purpose hall in Hamburg. Jokerit HC Oyj owns 50% of the new company.

Rautakirja further strengthened its position in the Baltic countries in October when its Latvian associated company, Narvesen Baltija SIA, signed a letter of intent to acquire an 85% holding in the Preses Apvieniba chain of kiosks. Suomalainen Kirjakauppa acquired 60% of Astro Raamatud, an Estonian book distributor and retailer, and mail order and online retailer, in October. Suomalainen Kirjakauppa acquired Yliopistokirjakauppa Oy's three bookshops and online shop in Finland, also in October.

Projections indicate that the retail trade in Finland for 2000 as whole will grow by a little under 5% and the wholesale trade by 8%. Although consumer confidence in respect of developments affecting their own budgets weakened during the early autumn, this is not expected to have a negative impact on Rautakirja's sales over the short term. Rautakirja's net sales for the year as a whole are projected to total FIM 3.8 billion, up 10% on 1999. The steep decline in stock market prices will serve to cut financial income. Despite increased personnel bonuses, the group's full-year result is expected to be at 1999 levels.

Rautakirja published its own interim report for the first nine months of the year on November 6, 2000.

Helsinki, November 15, 2000

Board of Directors SanomaWSOY Corporation