Constantin Film AG
Constantin Film AG announces provisional figures for the 2007 fiscal year
Constantin Film AG / Preliminary Results/Forecast Release of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- Constantin Film AG announces provisional figures for the 2007 fiscal year Earnings target reached in spite of difficult market environment Following changes to accounting and valuation principles, Group generates sales of € 225.0 million and an operating result of € 12.4 million Earnings per share of € 0.49 Munich, March 31, 2008 Constantin Film AG (ISIN DE0005800809) generated sales of EUR 225.0 million in the 2007 fiscal year according to provisional IFRS Group figures and after changes to accounting and valuation principles. Although this means that Group sales were 14.3 per cent lower than in the previous year – when the highest sales in the company’s entire history (EUR 262.7 million) were recorded – the Group reached its targets in every respect in spite of a difficult market environment. The sales achieved in the theatrical distribution operations amounted to EUR 33.4 million in the year under review (previous year: EUR 47.5 million) and accounted for 15 per cent of total sales. Theatrical sales were therefore EUR 14.1 million lower than in the previous year, when the major success of the in-house production PERFUME – THE STORY OF A MURDERER contributed a particularly large proportion of sales. Home entertainment sales totalled EUR 44.7 million, which corresponded to an increase of 59 per cent over the previous year (EUR 28.1 million). This growth is attributable essentially to exploitation of the strong 2006 distribution programme with films like PERFUME – THE STORY OF A MURDERER, HUI BUH – DAS SCHLOSSGESPENST or STEP UP, although it is also due to the good performance of individual films from the 2007 theatrical programme which were already released on video, such as FANTASTIC FOUR – RISE OF THE SILVER SURFER and DIE WILDEN HÜHNER UND DIE LIEBE. A number of films that went straight to video produced very good results too, e.g. LUCKY NUMBER SLEVIN and FEARLESS. The service production operations were again the biggest source of sales in 2007, contributing EUR 106.0 million (previous year: EUR 123.3 million). They include the TV productions by our subsidiaries Olga Film GmbH, MOOVIE – The art of entertainment GmbH, Rat Pack Filmproduktion GmbH and Westside Filmproduktion GmbH as well as the revenues from the marketing of the non-fiction productions by Constantin Entertainment GmbH. The TV sales generated in the 2007 fiscal year, i.e. the sales from the licensing of the TV rights to theatrical films and of TV in-house and co-productions, amounted to EUR 32.2 million (previous year: EUR 40.4 million). The gross profit in 2007 was EUR 32.0 million (previous year: EUR 33.5 million). The gross profit margin in the year under review was 14 per cent. This was about 1 percentage point higher than the previous year’s level of 13 per cent. The operating result (EBIT) generated in 2007 was EUR 12.4 million (previous year: EUR 14.2 million). Adjusted to eliminate the risk provision for films that are being exploited in subsequent years, the operating result amounted to EUR 12.7 million. This positive performance is based on the very good results achieved in fiction and non-fiction TV entertainment as well as on business in video/DVD marketing and the licensing of TV rights to theatrical films. The previous year’s success could not be repeated primarily because of the shortfalls in the theatrical operations. There have nevertheless been a sound overall performance and consistent growth over the past 4 years. The earnings attributable to the shareholders of the parent company amounted to EUR 6.2 million (previous year: EUR 7.7 million). Earnings per share were EUR 0.49 after EUR 0.60 in the previous year. The figures disclosed in this release take into account the changes to accounting and valuation principles made by the Constantin Group in the annual financial statements for 2007 as well as the relevant adjustments to the figures for the previous year. These changes relate essentially to two IFRS standards: according to IAS 20, public grants are no longer recognised in sales; they are instead offset against the production costs. According to the percentage of completion method specified in IAS 11, service productions are now recognised in sales and earnings on the basis of the percentage to which they have been completed. On balance, these changes lead to absolute decreases in sales as well as to shifts in sales and earnings between individual fiscal years. The outcome for the 2007 fiscal year is a decrease of about EUR 24.2 million in sales and a change in the operating result of about EUR -1.5 million. Earnings per share for the period under review differ by about EUR -0.12. The balance sheet total was EUR 333.3 million on December 31, 2007, which is a reduction of EUR 25.0 million over the previous year (December 31, 2006: EUR 308.4 million). This is due essentially to the depreciation of film assets because of the exploitation of films and to the increase in trade receivables. The film assets amounted to EUR 181.7 million on December 31, 2007, which is an increase of 6 per cent over the previous year (EUR 170.8 million). The increase is attributable to the high investments made in the year under review, primarily for national productions. Investments in film assets attributable to in-house productions amounted to EUR 68.9 million on December 31, 2007 (previous year: EUR 43.9 million). This means that the investment volume changed by 57 per cent compared with the previous year. The investments made in the year under review include theatrical films like THE BAADER MEINHOF COMPLEX, ANONYMA – EINE FRAU IN BERLIN, EFFI and THE WAVE. The film assets relating to in-house productions increased by EUR 26.1 million (23 per cent) over the previous year to EUR 137.5 million. EUR 10.2 million were invested in exploitation rights for distribution and licence trading in the 2007 fiscal year (previous year: EUR 20.3 million). The Constantin Film Group had funds of EUR 91.8 million on December 31, 2007 (previous year: EUR 79.5 million), while bank liabilities totalled EUR 112.1 million (previous year: EUR 119.4 million). Net debt was EUR 19.6 million lower than on December 31, 2006. Equity increased by EUR 5.8 million by comparison with the previous year and amounted to EUR 74.6 million on December 31, 2007. The theoretical equity ratio is 22 per cent (previous year: 22 per cent). If the funds and bank liabilities on December 31, 2007 and the film assets and advance payments received are balanced, the adjusted equity ratio amounts to 44 per cent (previous year: 40 per cent). A positive overall development of the business is Constantin Film AG’s aim in the 2008 fiscal year too, driven by the company’s performance and commitment in the core production and content distribution operations – even though the market environment has become tougher, due to increasing competition on the generally difficult German theatrical market and to further high cost pressure on producers from TV stations. In the theatrical distribution operations, such in-house productions as THE WAVE, THE BAADER MEINHOF COMPLEX, URMEL VOLL IN FAHRT, ANONYMA – EINE FRAU IN BERLIN, the co-production ASTERIX AT THE OLYMPIC GAMES and licensed films like STEP UP TO THE STREETS are and will be having a strong impact. We are expecting sales in the home entertainment and TV service production operations to reach at least the same level as in the previous year, whereas TV sales from licence trading will be increasing because of higher international revenues. It can be assumed that the growth prospects in the important home entertainment catalogue business will be good in the coming years if the market conditions remain constant, thanks to the return of numerous film rights. This gradual return of the Constantin Film library will continue to have a positive impact on TV rights sales, i.e. our licence trading operations, too. With the outstandingly talented creative staff who are committed to Constantin Film and with our highly motivated, excellent-quality team of employees, we are certain that we will tackle the tremendous challenges posed by the market effectively and are therefore again planning a fiscal year in 2008 that matches the success achieved in the previous years. We are budgeting sales of at least EUR 230 million and a positive operating result of at least EUR 12 million in 2008. The information provided about the 2007 fiscal year is based on provisional figures. The auditors will be completing their audit in the next few days and the complete audited and certified 2007 annual report is expected to be available as download from our website www.constantinfilm.de and the Deutsche Börse website www.deutsche-boerse.com on April 14th, 2008. It is not expected that there will be any changes to the information provided. If we make any forecasts or express any expectations in this release or if our statements relate to the future, there may be known and unknown risks and uncertainties associated with these statements. The actual results and developments may therefore differ considerably from the expectations expressed and the assumptions made. The development of the finance markets and exchange rates as well as changes in national and international laws, with particular respect to tax regulations, may have an impact too. The company does not assume any commitment to update statements about the future above and beyond legal stipulations. Investor Relations / Corporate Communications Yara Kes Telephone: +49 89-44 44 60 271 Fax: +49 89-44 44 60 196 E-mail: kes@constantin-film.de 31.03.2008 Financial News transmitted by DGAP ---------------------------------------------------------------------- Language: English Issuer: Constantin Film AG Feilitzschstraße 6 80802 München Deutschland Phone: +49 (0)89 44 44 60-0 Fax: +49 (0)89 44 44 60-666 E-mail: investorrelations@constantin-film.de Internet: www.constantin-film.de ISIN: DE0005800809 WKN: 580080 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------
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