A.S. Creation Tapeten AG

Earnings Release • Aug 8, 2005

News Details

Corporate | 8 August 2005 11:40

A.S. Création Tapeten achieves sales and earnings growth of 6.9% and 11.4%

Corporate-news transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— A.S. Création achieves sales and earnings growth of 6.9% and 11.4%, respectively in first half of 2005 On August 8, 2005, A.S. Création Tapeten AG, Germany’s largest wallpaper manufacturer, published its interim report for the six-month period ended June 30, 2005. A summary of the report is provided below: Sales increase in Germany and abroad While first-quarter sales already increased by 6.6%, the second quarter of 2005 was equally successful, with sales growing by 7.2%. This means that A.S. Création generated consolidated first-half sales of EUR 73.9 million, up 6.9% on the previous year’s EUR 69.1 million. This sales growth is fully attributable to the Wallpaper Division, whereas the Furnishing Fabrics Division managed to slow down the decline in sales without being able to offset it in full. Both the company’s domestic and international sales increased. As both the economic environment and the industry situation remain difficult, the Managing Board is satisfied with the sales growth. Further improvement in earnings position The company was able to implement its strategy of growing sales through innovations and higher-quality products instead of aggressive pricing also in the second quarter of 2005. As a result, the gross profit margin for the first six months of the year rose to 50.1% (2004: 49.4%). The increased gross profit was sufficient to cover the company’s advertising expenses, which have been expanded noticeably since the beginning of the year. In early 2005, A.S. Création launched a consumer advertising campaign, to attract consumers’ attention to modern non woven wallpapers highlighting their “high speed” benefits. In addition to advertisements in home-interest magazines and large-size billboards, wallpaper stores are provided with matching sales promotion materials. A.S. Création also participates in the co- op advertising campaign of the German Association of Wallpaper Manufacturers (VDT). Since spring 2005, a commercial targeted at the younger audience has been shown in cinemas throughout Germany. These expenses weighed down earnings in the first six months of the year. A.S. Création’s first-half earnings before taxes totalled EUR 5.7 million, up 11.4% on the previous year’s EUR 5.1 million. At 7.8%, the Group’s pre-tax profit margin is up on the previous year’s 7.4 %. On a positive note, the Furnishing Fabrics Division has returned to the black in the first half of 2005, reporting a pre-tax profit of EUR 38,000. In the first half of the previous year, the Division still posted a loss of EUR 6,000. DVFA/SG earnings per share amounted to EUR 1.24 in the first half of 2005 (2004: EUR 1.12). High capital expenditure and record dividend As a result of the improved earnings position, the company’s internal financing strength increased, with gross cash flow rising 8.7% from the previous year’s EUR 7.5 million to EUR 8.1 million. However, the increased gross cash flow compared with significantly increased financing requirements. The purchase of a printing press from a bankrupt Dutch competitor pushed capital expenditure to EUR 6.1 million in the first half of 2005 (2004: EUR 3.7 million). Also, at EUR 2.9 million, A.S. Création paid out the highest dividend in its history in May 2005. Outlook remains optimistic Against the background of the successful performance in the first half of the year, the Managing Board has confirmed its projections for the full year 2005, which see sales at approx. EUR 140 million and net profit at between EUR 7 and 7.5 million. A summary of the Group’s key figures for the first half of 2005 is provided below: 01.01. 01.01. -30.06. -30.06. 2005 2004 Change ————————————————— —— ——- —— Sales EUR ‘000 73,870 69,114 6.9 % Earnings before interest and taxes (EBIT) EUR ‘000 6,381 5,870 8.7 % Earnings before income taxes EUR ‘000 5,730 5,143 11.4 % Net profit EUR ‘000 3,445 3,106 10.9 % DVFA/SG earnings per share EUR/share 1.24 1.12 10.7 % Gross cash flow EUR ‘000 8,137 7,486 8.7 % Capital expenditures EUR ‘000 6,109 3,724 64.0 % Depreciation EUR ‘000 4,264 3,806 12.0 % Number of employees (average) 637 633 0.6 % Gummersbach, August 8, 2005 A.S. Création Tapeten AG The Managing Board Inquiries: Maik Krämer, Director of Finance, phone + 49 – (0)22 61/542-387, fax + 49 – (0)22 61/542-304, e-mail m.kraemer@as-creation.de The full interim report is available at www.as-creation.com/investor or from: A.S. Création Tapeten AG, Mrs. Börngen, Südstr. 47, D – 51645 Gummersbach, phone + 49 – (0)22 61/542-350 End of announcement (c)DGAP 08.08.2005 —————————————————————————— WKN: 507990; ISIN: DE0005079909; Index: Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart 081140 Aug 05