Essanelle Hair Group presents 2006 results

Sales rise by 3.5% to EUR 117.5 million

Earnings before taxes up 22.5% to EUR 5.3 million

Düsseldorf, March 30, 2007 – Essanelle Hair Group AG reports sales and earnings growth for the financial year 2006. Sales grew by 3.5% from EUR 113.5 million to EUR 117.5 million. Under the expansion strategy launched in mid-2005, the company opened 56 new salons in the past year alone.

Uwe Grimminger, the chairman of the company’s Managing Board, said: “The 2006 figures reflect the effectiveness of our strategy of growing sales and earnings through the opening of new salons. While sales growth in the first half of the year was still rather moderate at 2%, it accelerated to 7% in the fourth quarter. Even though we did not quite match our 5% growth target for the full financial year, this advance shows that we are on the right track and that we are looking at considerable potential in 2007 and the following years.”

The highest growth rates were contributed by the HairExpress concept whose sales rose by 28.5% to EUR 17.6 million. The Beauty Hair Shops, which exclusively sell salon products, even increased their sales by 34.4% to EUR 4.3 million. This lifted the Group’s total sales of high-margin products to 15.4% of total sales which is considerably higher than the industry average. The TOP TEN concept launched in late 2005 generated approximately EUR 1.9 million in sales; the number of salons was increased to 15 salons by year-end 2006.

Continued earnings growth

While the original forecast had assumed earnings at the prior-year level, the Essanelle Hair Group reports growth across all key earnings figures despite the high investments in new salons. EBITDA (earnings before interest, tax, depreciation and amortisation) rose by 5.4% from EUR 10.1 million to EUR 10.6 million. Earnings before taxes increased by 22.5% from EUR 4.3 million in 2005 to EUR 5.3 million. Net income advanced by 14.6% from EUR 2.6 million to EUR 2.9 million. It needs to be taken in account that the fictitious tax burden according to IFRS is EUR 2.4 million even though only EUR 0.6 million are actually payable under HGB. Earnings per share rose from EUR 0.57 to EUR 0.66. Apart from the strong business trend, Essanelle Hair Group’s 2006 profitability also benefited from the non-recurrent proceeds of the sale of the mod’s hair franchise rights which yielded EUR 0.8 million.

More details on the financial year 2006 as well as sales and earnings guidance for 2007 will be provided by the company’s Managing Board at the annual accounts press conference in Düsseldorf on April 25.

The English version of Essanelle Hair Group’s annual accounts will be posted on the company’s website as of April 5.

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