Edel SE & Co. KGaA

Earnings Release • Nov 16, 1999

News Details

Ad-hoc | 16 November 1999 19:30

Ad hoc-Service: edel music AG englisch

Ad-hoc announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. —————————————————————————— edel music AG, Hamburg – the first three quarters 1999 vital strategic decisions for future growth determined despite difficult market situation 56.8% sales increase sales and income will be shifted from 1999 to 2000 one billion sales mark will already be reached next year edel music AG, Hamburg, has realised its growth strategy in the third quarter 1999 faster than expected. Due to strategic acquisitions, the company made decisive steps towards becoming the leading independent music company in the world. The acquisition of 80% of Sony Music’s independent distribution company RED gives edel access to a complete distribution infrastructure in the most important music market of the world, the U.S. By means of participation in the TV-channel VIVA, the undisputed #1 among the German music broadcasters, edel music AG consequently pursues its multimedia-strategy of target group oriented marketing. Additionally, promising acquisitions of catalogues were concluded and an extensive U.S. Joint Venture with Deston Entertainment entered into. An agreement with Desmond Child, one of the most important songwriters (Ricky Martin, Aerosmith, Bon Jovi, Cher) was signed. The cooperation with BUNTE Entertainment Verlag offers edel music AG a strongly- branded platform for the distribution of music concepts on print basis. In the first three quarters of 1999 sales rose by 56.8% from DM 182.3 million to DM 285.9 million. Despite the overall downward trends in the music market – in 1999 a decline of 10% in Germany is expected – edel music AG stood its ground in comparison to its competitors. Unfortunately, the release of three important albums, originally planned for the current business year, has to be postponed until the year 2000, therewith also shifting sales and income. This delay already resulted in a decrease in income in the third quarter of 1999. In the first nine months EBIT was reduced from DM + 7.5 million to DM – 1.8 million. As a result the board of directors merely expects a slightly positive annual group result. Due to the accelerated expansion of the group, edel music AG will significantly overfulfill its strategic goals. New sources of income and expected synergies, resulting from the integration of Play it again Sam, Eddy Ouwens/ABCD, Mega and the above mentioned participations, lead to an upward revision of the forecast for 2000. Sales will already surpass the DM 1 billion mark next year. EBIT will account for approximately DM 96 million and EBITDA for approximately DM 121 million. With these strategic acquisitions and participations, edel music AG is in an ideal position to become the most significant independent player in the world. Moreover, the company will further diversify the basis of the group through acquisition in the future. A detailed quarterly report will be published on 29. November 1999. Hamburg, 16th November, 1999 End of Message