Ad-hoc | 15 November 2000 07:30

Ad hoc-Service: Vivanco Gruppe AG English

Ad hoc-announcement edited and sent by DGAP. The sender is responsible for the content of this announcement. —————————————————————————— Vivanco result strongly impacted by non-recurring factors Sales growth continues to outperform forecast – Loss expected at year’s end Vivanco AG, based in Ahrensburg, Germany, has been able to sustain its powerful growth in the third quarter of 2000, as the latest figures show. Sales at the leading German and European IT accessory specialist provider rose by nearly 37% to 226.9 million DEM (1999: 164.1 mill. DEM). Internal growth (not including acquisitions) of +25% was an important accelerant in this equation. The growth rate, which continues to lie appreciably above projections, confirms the accuracy of the year’s projected sales target of 330 (1999: 246.7) million DEM. Originally the annual turnover for 2000 was forecast at 290 million DEM. Vivanco develops, produces and markets sophisticated accessories for high-tech equipment, computers and mobile phones. “The information technology (IT) segment figured as the most outstanding growth engine; it was able to more than double its sales to a total of 43.2 (20.2) million DEM,” explained Management Board member Christoph von Guionneau, who is temporarily heading the Public Relations and Investor Relations Division on behalf of his colleague Elard Raben, who has been taken ill. Acting on the advice of his physicians, Raben (who with his family is also the majority shareholder in Vivanco AG) will be returning to his duties on the Management Board in several weeks’ time. By expanding the Management Board from three to five members in June of this year, Vivanco established the basis – at the highest executive level – for effectively managing the company’s strong growth. Showing a gain of 32% and total turnover of 80.1 (60.9) million DEM, the Telecommunications segment also performed considerably better than projected. In addition, home entertainment electronics exhibited solid growth of 23%, reaching 83.4 (67.8) million DEM. Even this outstanding growth was not able to fully offset the impact of extraordinary factors. The third-quarter result prior to depreciation, taxes and interest – adjusted for the 1.1 million DEM spent on e-commerce activities-was 14.2 million DEM (16.2 mill. DEM prior to the stock exchange listing). The appreciation of the U.S. dollar, a change constituting a rise of some 30% compared to last year’s nine-month mark, could not be compensated by action taken on the sales and purchasing front. Given such an extreme increase in the exchange rate, both the reductions in purchase prices that were introduced for suppliers and the higher sales prices instituted for our customers require a considerable amount of time to take effect. The influence of the dollar appreciation alone has placed an unanticipated four million DEM burden on the results of the current year’s first nine months. This was compounded by the 5.1 million DEM allowance for the loss of the 24.7% investment in boeder Holding GmbH, Eschborn, which filed for insolvency in October, Further factors putting an unexpected strain on the results were an unbudgeted restructuring charge of 1.3 million DEM, tax reserves of 0.5 million DEM set up in the wake of an audit, and additional finance charges of 0.9 million DEM attributable to higher interest. These extraordinary influences – which did not factor in the company’s planning and total some 11.8 million DEM – mean that Vivanco AG is reporting a negative result before taxes of -3.9 million DEM (last year: +8.3 million DEM) at September 30th. An extraordinary, one-time tax burden of 3.9 million DEM (which did not affect liquidity) also came to bear on results. It ensued from changes due to the German Tax Reduction Act passed in July, specifically the tax exemption of profits from the sale of shares in capital enterprises. The tax deferral shown at June 30 was thus adjusted for the new legislation, which provides for a decrease in corporate income tax to a flat rate of 25%. This will act to lower the company’s average tax rate by some seven percentage points – to approximately 37% – beginning in 2001. This tax effect produces a negative result at September 30: a minus of 8.0 million DEM (contrasting with a 4.5 mill. DEM plus in 1999). Vivanco AG is confident that the steps taken to reduce purchase prices for suppliers, the strategic implementation of the restructuring program commenced at mid-year, and an increase in sales prices at the customer end will result in a thoroughly healthy balance in the year 2001. The detailed third-quarter report can be accessed at www.vivanco.de under the heading “Investor Relations” beginning on Wednesday, November 15, 2000. Ahrensburg, Germany November 15, 2000 End of Message