Essanelle Hair Group
Ad Hoc Announcement

Essanelle Hair Group presents preliminary results for 2005
Key earnings figures exceed expectations
Preliminary pre-tax earnings (IFRS) rise to Euro 4.3 million

Düsseldorf, 1 March 2006 – On the basis of the preliminary annual figures for the past 2005 financial year, Essanelle Hair Group AG has succeeded in further improving the company’s earnings situation. The figures compiled in accordance with the German Commercial Code (HGB) show an increase of 44% in pre-tax earnings in 2005 from Euro 1.8 million to Euro 2.6 million. The company had forecast Euro 2.3 million. Annual net income rose to Euro 2.3 million, an increase of 53% on the previous year’s figure.

Based on the first-time application of IFRS accounting standards, preliminary calculations show that Essanelle Hair Group AG generated earnings before interest, tax, depreciation and amortisation (EBITDA) of Euro 10.1 million. This figure is at the same level as in the previous year in spite of the company’s expansion. Pre-tax earnings calculated in line with IFRS rose to Euro 4.3 million, compared with Euro 3.5 million in 2004. Mainly as a result of the discontinuation of goodwill amortisation, this figure is considerably higher than the equivalent figure calculated in line with the German Commercial Code (HGB). The fictitious taxation of this additional income and the loss carryovers, which IFRS does not permit to be utilised, results in a purely hypothetical tax burden of Euro 1.8 million. However, this does not have any additional impact on the cash flow, given that the actual tax burden amounts to only Euro 0.3 million. Annual net income based on IFRS rose to Euro 2.6 million and was thus around 30% higher than the previous year’s figure of Euro 2.0 million. Earnings per share thus amount to Euro 0.57 for 2005, compared with Euro 0.45 in the previous year. Excluding the fictitious tax burden, earnings per share would amount to Euro 0.90, compared with Euro 0.73 in 2004.

Group sales at Essanelle Hair Group amounted to around Euro 129.8 million in 2005, compared with Euro 131.1 million. Partly as a result of the deconsolidation of the last mod’s hair salons, consolidated sales amounted to Euro 113.5 million, compared with Euro 114.7 million. This figure was also affected by the company’s growth driven by salon openings only being promoted in the second half of 2005. As planned, the company will press more rapidly ahead with its expansion plans in 2006.

Contact:
Haubrok Investor Relations
Michael Müller
+49-21 56-49 65 195
M.Mueller@haubrok.de