Edel SE & Co. KGaA

Earnings Release • Aug 31, 2001

News Details

Ad-hoc | 31 August 2001 21:18

edel music AG english

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Changed strategy focuses on A&R and product development Re-evaluation of distribution assets, massive write downs Six month sales down 11 % to 482.39 million DEM, EBIT including extra ordinaries at minus 172.22 million DEM Hamburg, 31. August 2001 – edel music AG, Hamburg, announces an overall change in strategy and a redefinition of its core businesses. edel music AG will in future strongly focus on the development of its own A&R (Artist & Repertoire) in Europe and the US. As a consequence, edel has re-evaluated its main distribution assets. The distribution and licensing relationships with Disney and Newscorp’s Mushroom Records have been terminated resulting in significant one time non-cash write-offs. At the same time, edel’s core distribution companies (PIAS, RED, ABCD) have also been written down substantially which has resulted in significant non cash charges. All future investments will be content related only. Cash generated by a possible divestiture of any of the above mentioned assets will be used for content development and a significant reduction of bank debt. After this refocusing, edel music AG expects sales of app. 600 to 650 million DEM per annum. A serious projection for future earnings will only be possible after the completed restructuring. For the first six months 2001, edel recorded sales of 482.39 million DEM (2000: 543.60 million DEM), an 11% decrease against 2000, in line with the world-wide decline in music sales (Germany minus 12.6%, US minus 4.4%). EBIT for the six month period including the above mentioned extraordinary charges was minus 172.22 million DEM (2000: minus 8.64 million DEM), EBITDA was at minus 71.08 million DEM (2000: 5.83 million DEM). Excluding extraordinary charges, EBIT was minus 48.73 million DEM and EBITDA minus 29.05 million DEM. Results for the first six months do not include the extraordinary gain and positive net debt effect from the disposal of edel music AG’s shareholding in Viva, since regulatory approval was only received in the third quarter 2001. Total shareholders equity was reduced to 141.18 million DEM, total cash on June 30th was 32.62 million DEM. Since the current focus of the edel management is the restructuring, edel does not project any improvement in results for the 9 month business year 2001. edel music AG will start its new full 12 month business year October 1, 2001. end of ad-hoc-announcement (c)DGAP 31.08.2001 ——————————————————————————– WKN: 564951; Index: Listed: Neuer Markt in Frankfurt; Freiverkehr in Berlin, Düsseldorf, Hamburg, München und Stuttgart 312118 Aug 01