Aktsiaselts Tallink Grupp - NASDAQ OMX Baltic

We initially chartered all of our vessels, but the new management team changed our operating model from
chartering to ship ownership in 1997, during which we also acquired our first three vessels. In the same year, we
were also subject to a management buy-out by our current management, the present group structure was
introduced and AS Hansatee became Aktsiaselts Hansatee Grupp (subsequently, renamed Aktsiaselts Tallink
Grupp).
In 1998, we achieved the milestone of two million passengers annually and introduced the first route
between Sweden and Estonia (Kapellskär—Paldiski). The Stockholm—Tallinn route was introduced in January
2001. We continued to implement our growth strategy by acquiring additional cruise and high-speed ferries and
by starting to invest in new vessels. We ordered two high-class cruise ferries, the first of which, Romantika, was
delivered in 2002.
In 2003, a group of international institutional investors became shareholders of Tallink through an
international private placement transaction. The private placement, which amounted to EUR 37 million in total,
consisted of both an issue of new shares by Tallink and the sale of existing shares by Tallink’s largest
shareholder, Infortar. The private placement transaction enabled us to continue to pursue our growth strategy. In
2004, we acquired two additional high-speed ferries, our second ro-ro cargo vessel and introduced Romantika’s
sister vessel, Victoria I.
Operational Segments
Our main revenue sources are passenger ticket sales, restaurant and shop sales and sales of cargo transport.
Passenger tickets are sold through our own sales network and through travel agencies in Finland, Sweden,
Estonia, Latvia, Lithuania and Russia. Ticket sales include the price of tickets sold, cabins rented to passengers
as well as, for example, use of conference facilities and transport of private cars. Restaurant and shop sales
include all sales made to passengers onboard the ferries, including sales of tax-free goods and sales in
restaurants, bars and casinos. Sales of cargo transport include tonnage and unit-specific payments for ro-ro cargo
and buses.
Routes Operated
Finland—Estonia Route
We transport both passengers and cargo on the well-developed Finland—Estonia route between Helsinki
and Tallinn, the origins of which date back to the Soviet Union era. Following a decade of strong growth in the
1990s, passenger numbers between Finland and Estonia have been steady at approximately six million
passengers annually over the last five years. Approximately 97 percent of Finnish passengers visiting Estonia
arrive by ferry. We have a strong position on this route and currently operate the cruise ferries Romantika and
Meloodia I, both of which carry passengers and ro-ro cargo units. In addition, we operate four high-speed ferries
and the ro-ro cargo vessel Kapella on this route.
The cruise ferry Romantika currently departs once a day from each port taking the evening departure from
Helsinki and the voyage takes three and a half hours. Despite the short distance, Romantika offers a true minicruise
experience during which passengers from Finland spend the evening and night on the cruise ferry and are
able to spend a few hours in Tallinn in the morning before the ship returns to Helsinki. Meloodia I departs twice
daily from each port, with the journey time being three hours and fifteen minutes. Meloodia I’s primary product
is the day cruise where passengers leave for Tallinn in the morning, spending about four and a half hours in the
city before returning in the evening. The second departure of Meloodia I from the respective port is a “night
departure,” intended mainly for cargo and passengers with cars. Both of the cruise ferries also carry ro-ro cargo,
buses and private cars on the car/cargo deck.
We also operate four high-speed ferries on the Helsinki—Tallinn route, namely Tallink AutoExpress,
Tallink AutoExpress 2, Tallink AutoExpress 3 and Tallink AutoExpress 4. These high-speed ferries offer
frequent daily departures between the two destinations. The crossing is made in approximately one and a half
hours and as such, the high-speed ferries are ideal for passengers who need to reach their destination quickly.
Traffic on the high-speed ferries is seasonal, as the service is suspended during the winter months (typically
December/January—March/April) due to the potentially difficult ice conditions on the Northern Baltic Sea.
Passengers on these vessels include business travelers, day cruisers and passengers with overnight hotel
packages. The high-speed ferries also carry a limited number of cars and buses but not heavier ro-ro cargo.
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