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This press release is an advertisement and not a prospectus within the meaning of the applicable laws. This press release is not an offer to sell securities or the solicitation of an offer to buy securities. Any offering of securities to the public referred to in this press release will be made only on the basis of information contained in the prospectus (the “Prospectus”) to be published in due course by Novaturas AB (the “Company”) in connection with the planned initial public offering of its shares in Poland, in Lithuania and in Estonia as well as on their admission and introduction to trading on regulated markets organized by the Warsaw Stock Exchange and by AB Nasdaq Vilnius and which, when published, will be obtained from the website of the Company (www.novaturasgroup.com). Additionally, for information purposes only, the Prospectus will be published (i) in the English language together with its summary translated into Polish on the website of Powszechna Kasa Oszczędności Bank Polski S.A. Oddział – Dom Maklerski PKO Banku Polskiego w Warszawie (www.dm.pkobp.pl), (ii) in the English language together with its summary translated into Lithuanian on the Lithuanian website of Swedbank AB (www.swedbank.lt); and (iii) in the English language together with its summary translated into Estonian on the Estonian website of Swedbank AB (www.swedbank.ee). 

Press release
14 February 2018

Novaturas confirms intention to conduct public offering and introduce shares to Warsaw Stock Exchange and Nasdaq Vilnius

Novaturas Group posts strong financial results for 2017 and early booking sales for 2018

• Novaturas, the leader in the tour operator market in the Baltic countries, has confirmed its intention to conduct a public share offering and seek the admission and introduction of its shares to trading on the Warsaw Stock Exchange and Nasdaq Vilnius.
• The offering is expected to be conducted in Poland, Lithuania and Estonia. The Company’s shares will also be offered to selected foreign institutional investors outside the territory of the United States based on applicable regulations.
• The offering is expected to cover up to 50% of the Company’s existing shares, which are being sold by some of its existing shareholders, including the majority shareholder – Central European Tour Operator S.a.r.l. (CETO) (an entity owned by Polish Private Equity Fund VI, managed by Enterprise Investors). Novaturas is not planning to increase its share capital and raise additional funds through the offering.
• If there is strong demand for the Company’s shares, CETO might also offer an additional stake of up to 16% of the existing shares. If all of the offered shares are purchased by investors, new investors will end up holding up to 50% of the Company’s shares in the base scenario and up to 66% if the additional pool is tapped.
• The remaining shares belonging to the current minority shareholders will be subject to a lock-up agreement for a period of 540 days following the date of the first listing of the Company’s shares on the WSE and Nasdaq, while the shares belonging to CETO will be subject to a lock-up agreement for a period of 180 days. The Company will be subject to a 360-day lock-up period in respect of any new share issues.
• The brokerage firm PKO BP Securities will be acting as Global Coordinator and Joint Bookrunner for the planned offering. Trigon DM and Swedbank will also be acting as Joint Bookrunners. PKO BP Securities will also serve as the Offering Agent in Poland, and Swedbank in Lithuania and Estonia.
• The offering’s schedule will depend on, among other things, market conditions and the requisite approvals from supervisory authorities as well as appropriate corporate decisions.
• Detailed information on the offering will be published in the prospectus once it is approved by the Bank of Lithuania and notified to the Polish Financial Supervision Authority (in Polish: Komisja Nadzoru Finansowego; the “PFSA”) and the Estonian Financial Supervision Authority (in Estonian: Finantsinspektsioon; the “EFSA”).
• The Company’s business model is characterised by high cash flows from operating activities (corresponding to over 100% of EBITDA) and low capital expenditure needs, which allows it to share a large portion of earnings with its shareholders. Regular dividend payments are one of the key elements in the Company’s strategy. The Management Board expects to pay out an interim dividend of approx. EUR 6 million based on audited financial results for the first half of 2018. In the long term, the Management Board intends to recommend dividend payments corresponding to 70-80% of net profit.
• In 2017, Novaturas Group posted strong financial results. Revenue increased by nearly 40% y/y to EUR 141 million. EBITDA reached EUR 10.6 million, while net profit reached almost EUR 8.2 million, which in both cases denotes a nearly two-fold increase comparing to 2016.
• The Group’s record early-booking sales for the 2018 summer season are also very promising. Their volume reached 61 thousand seats sold at the end of 2017, up by 84% compared to the same period in the preceding year.

“Novaturas is the leader in the very attractive tourism market in the Baltic countries, with a prominent brand and a transparent and effective business model. Our goal is to maintain #1 position in all Baltic markets and develop in Belarus that is a very promising market for us. We do not own hotels, aircraft or coaches and we don’t expect to invest in such because in our view focusing on core business can generate higher rates of return than investing in fixed assets. We prefer to share our earnings with our shareholders. Growing demand for the tours offered by Novaturas is driving our sales, while at the same time we are managing to maintain high profitability ratios,” said Linas Aldonis, CEO of Novaturas.

About Novaturas

Novaturas Group is the leader of the tour operator market in Lithuania, Latvia and Estonia, in terms of both sales value and passenger volume. The Group’s market share in the organised chartered flights segment exceeds 40% in the region.

The Baltic countries, with a total population of 6.2 million, offer solid growth potential for tour operators. Thanks to favourable macroeconomic conditions supported by strong labour market, growing disposable income and increased private consumption, more people are able to afford foreign holidays and they are spending greater amounts on this. At the same time, tourism market saturation is still low comparing to Western European markets.

Novaturas was established in 1999, became the market leader in the Baltics in 2004 and has maintained the top position ever since. The Company's competitive advantages include a strong and well-recognised brand, high customer loyalty and very good relations with tourism agencies and service providers, thanks to which Novaturas can provide its clients with a diverse and attractively priced offering.

Aside from the Baltics, Novaturas has begun offering its products in Belarus, where they are retailed through local partners. The short distance from Minsk to the airport in Vilnius gives the Company an undeniable advantage in developing its business on this promising market with a population of 9.5 million and with a very low market saturation.

Novaturas has a diversified product offering that allows it to reach a wide range of customers and flexibly respond to their changing preferences. The Group offers both summer and winter package holidays as well as sightseeing tours by coach or plane to more than 30 destinations worldwide, including the most popular holiday resorts in Southern Europe as well as select locations in North Africa, the Middle East, Asia and Latin America.

The Group's strategy also aims to retain diverse and complementary distribution channels. Novaturas works with over 400 travel agencies, including all of the major agencies in the Baltics, and more than 60 in Belarus. It also operates retail offices of its own in main cities of Lithuania, Latvia and Estonia, and is investing in further development of its e-commerce channel.

Novaturas continues to attract new clients thanks to its attractive and diverse offering and the high quality of its services. The rising demand for the Group's tours drives growth in operational scale and in market share, which translates into dynamic growth in financial results.

Novaturas Group's financial results
  

The current year is also looking very promising for Novaturas Group, as confirmed by early bookings for the 2018 summer season. Demand for the Group's foreign tours is dynamically growing, even when compared to the very high client activity last year. Early bookings at the end of 2017 were up by 84% compared to the same period in the preceding year.

The effectiveness of the Company's asset-light business model is characterised by strong cash flows from operating activities (exceeding 100% of EBITDA) and low capital expenditures (EUR 0.3 million in 2017).

Key elements of the Group's strategy

• Benefit from the travel market growth and retain leading position in the Baltics
• Continue expansion of offering in order to retain existing clients and attract new ones, translating this into sales growth
• Deliver further geographic expansion – Belarus
• Maintain well-balanced distribution channels, with growing importance of e-commerce
• Secure further growth in operational scale combined with high profitability ratios and cash generation
• Provide regular dividend payments

Shareholding structure

Central European Tour Operator S.a.r.l. (CETO), owned by Polish Enterprise Fund VI, a private equity fund managed by Enterprise Investors – one of the largest private equity firms in Central and Eastern Europe, has been the Company's majority shareholder since 2007. Currently, CETO holds a 70.72% stake in Novaturas. The other shares are held by three natural persons, each of whom owns a 9.76% stake.

This press release does not comprise a prospectus for the purposes of Directive 2003/71/EC and does not contain or constitute or form part of any offer or invitation, or any solicitation of an offer, for securities and should not be relied on in connection with any contract or commitment whatsoever. The offering of the securities referred to in this press release (the “Offering”) and the distribution of this press release and other information in connection with the Offering in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This press release is not an offer for sale of securities of the Company in the United States. Securities of the Company referred to herein may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. The Company has not registered and does not intend to register any portion of the Offering in the United States or to conduct a public offering of any securities in the United States.

This press release is directed only at (i) persons who are outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order'”) and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order or (iv) other persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the Offering may lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons'”). Any investment activity to which this press release relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. The Offering will not be made to the public in the United Kingdom.

This press release is for promotional purposes only and under no circumstances shall constitute an offer or invitation, of form the basis for a decision, to invest in the securities of the Company. A prospectus, when approved by the Bank of Lithuania – the Lithuanian capital markets authority together with the Polish, Lithuanian and Estonian translations of the summary and notified to the Polish Financial Supervision Authority and Estonian Financial Supervision Authority, will be the sole legally binding document containing information on the Company and the Offering as well as on admission and introduction of Company’s securities to trading on regulated markets organized by the Warsaw Stock Exchange and by AB Nasdaq Vilnius and which, when published, will be obtained from the website of the Company (www.novaturasgroup.com). Additionally, for information purposes only, the Prospectus will be published (i) in the English language together with its summary translated into Polish on the website of Powszechna Kasa Oszczędności Bank Polski S.A. Oddział – Dom Maklerski PKO Banku Polskiego w Warszawie (www.dm.pkobp.pl), (ii) in the English language together with its summary translated into Lithuanian on the Lithuanian website of Swedbank AB (www.swedbank.lt); and (iii) in the English language together with its summary translated into Estonian on the Estonian website of Swedbank AB (www.swedbank.ee).

This press release does not constitute a recommendation within the meaning of the Regulation of the Polish Minister of Finance Regarding Information Constituting Recommendations Concerning Financial Instruments or Issuers Thereof dated 19 October 2005.

No reliance may be placed for any purpose whatsoever on the information contained in this press release, any verbal discussion thereof, and such information may not be complete or accurate.

Acquiring investments to which this press release relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering investment should consult an authorized person specializing in advising on such investments.

Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna Oddział – Dom Maklerski PKO Banku Polskiego w Warszawie, Trigon Dom Maklerski S.A. and Swedbank AB are acting solely for the Selling Shareholders and the Company and no one else in connection with the Offering, and will not be responsible to anyone other than the Selling Shareholders and the Company for providing the protections afforded to their clients nor for providing advice in connection with the Offering.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward-looking statements by terms such as ‘expect’, ‘believe’, ‘anticipate’, ‘estimate’, ‘intend’, ‘will’, ‘could’, ‘may’ or ‘might’ or other similar expressions. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including risks specifically related to the Company and its operations.