Annual Report 2000 (PDF) - Loewe AG > Aktuell

Annual Report 2000 AN EXPERIENCE FOR ALL YOUR SENSES

2000 Loewe AG.
KEY FIGURES
IAS HGB/proforma
in EUR million 2000 1999 1998 1997 1996
Sales 363.6 309.5 283.2 236.5 227.4
Non-German 151.8 111.0 90.1 61.0 51.8
Non-German in % 41.7 35.9 31.8 25.8 22.8
Consumer electronics 288.8 278.5 248.9 205.4 197.2
Multimedia 50.9 5.8 2.9 – –
Telecommunications 23.9 25.2 31.4 31.1 30.2
Earnings before interest and taxes
(EBIT)* 21.9 18.0 14.2 7.4 5.6
Consumer electronics 20.2 19.5 15.9 6.2 4.4
Multimedia 2.1 – 1.0 – 1.1 – –
Telecommunications – 0.4 – 0.5 – 0.6 1.2 1.2
Net income/loss after
minority interests 12.0 5.3 1.7 – 0.2 2.2
Earnings per share in EUR** 1.70 1.16 0.88 0.50 0.34
Dividend per share in EUR 0.85 0.0 0.0 0.0 0.0
Net assets
Shareholders’ equity 69.5 57.5 15.3 15.2 15.8
Total assets 205.1 177.6 160.3 133.7 134.7
Capital ratio in % 33.9 32.4 9.5 11.4 11.7
Further key figures
Net cash provided
by operating activities 31.1 28.4 14.2 29.6 9.7
Capital expenditure 23.7 18.5 18.2 15.8 12.7
Depreciation and amortisation 18.5 16.2 16.8 10.7 10.6
Development costs 12.0 11.3 10.6 10.0 9.4
Return on equity in % 17.3 9.2 11.2 – 1.6 14.8
Return on capital employed in % 11.9 5.6 1.9 – 0.3 3.0
Number of employees 1,106 1,087 1,071 1,048 1,097
Sales per employee in EUR thousand 329 285 264 226 207
Loewe at a glance
* In 1999 and 2000 after transfer of the interest from the allocation to pension provisions to
interest expenses
** Until 1999 after adjustment for extraordinary expenses, including the income tax of 40%
payable thereon

Consumer electronics
LOEWE AG
BUSINESS DIVISIONS
in EUR million 2000 1999 +/– in%
Sales 363.6 309.5 + 17
EBIT 21.9 18.0 + 22
Earnings per share in EUR 1.70 1.16 + 47
Multimedia
THE YEAR IN WORDS
Mission Statement 3
Preface by the Chairman of the Executive Board 4
Report of the Supervisory Board 6
The Loewe Share 8
Key events 12
Management Report 14
Experience Perfection 56
Experience Design 62
Experience Innovation 68
International Markets 74
THE YEAR IN FIGURES
Telecommunications
Annual Financial Statements 80
Consolidated Income Statement 83
Consolidated Balance Sheet 84
Consolidated Cash Flow Statement 85
Notes to the Consolidated Financial Statements
of Loewe AG 86
Management Bodies and Offices Held 108
Independent Auditors’ Report 110
Financial Calendar 111
Contacts 112
Production Credits 112
1 2000

2000 2 Loewe AG.
EXPERIENCE WITH ALL YOUR SENSES – SEE AND HEAR WITH ALL YOUR SENSES

Seeing and hearing are our profession. Eyes and ears are the
keys to the senses, creating experiences from sounds and images.
Loewe captures them, giving them a beautiful form and pure
elegance. This is our philosophy. You demand high aesthetic stan-
dards, surprising ideas and a strong desire for quality. Enriched
by many “future” pixels. We are innovative because we strive for
perfection. We invest in multimedia, not to be trendy, but
because we are unshakably convinced of its success. We have our
own, clear idea of how it will help us. This is what makes us
always better and more successful. We will stay on this path in
the future.
3 2000

2000 4 Preface by the Chairman of the Executive Board. Loewe AG
GERHARD SCHAAS
Engineer, responsible for
Development and Production.
At Loewe since 1973.
DR. BURKHARD BAMBERGER
Business economist, responsible
for Finance, Controlling, and IT.
At Loewe since 1998.
DR. RAINER HECKER
Industrial economist,
Chairman of the Executive
Board, responsible for
Strategy and Services.
At Loewe since 1982.
KLAUS DEISLER
Businessman, responsible
for Marketing and Sales.
At Loewe since 1979.

EXPERIENCE WITH ALL YOUR SENSES – ENJOY WITH ALL YOUR SENSES
DEAR SHAREHOLDERS,
The business year ended December 31, 2000 was the most successful year
in Loewe’s history.
Defining qualities of the year 2000 included the improvement of
our competitive position with multimedia products, our increased success
in the European markets, and the continued rise in profitability. We managed
to make significant advances in many of the sectors that are important
for Loewe. Our plasma television Spheros won Germany’s coveted
design award, and demand for the multimedia televisions launched in 2000
exceeded expectations. In addition, by investing in a new product line at
our Kronach facility, we improved productivity in television production and
adjusted production capacities to the greater demand for Loewe products.
The Company’s solid equity base and the renewed increase in our
EBIT margin as well as our transparent information policy to shareholders
led to above-average performance for Loewe stock throughout the year.
Not only related to our stock market segment (SMAX), but also in comparison
to all relevant market indices, Loewe stock held its ground well in the
year 2000 and with a doubling of its value fulfilled expectations. Moreover,
the shareholders will participate in the good results of our Company with
the proposed dividend of EUR 0.85 per share.
Loewe not only performed significantly better than the industry
average in terms of sales and earnings, but also made important inroads to
the future. Our new partnerships, for example with Sharp, the Japanese
world market leader for LCD flat screen televisions, and with Germany’s
network ZDF for Internet address codes confirm our leading market position
and technological competence.
OUR SUPREME GOAL IS TO CONTINUOUSLY INCREASE LOEWE’S VALUE BY BALANCING
THE INTERESTS OF OUR SHAREHOLDERS, CUSTOMERS, EMPLOYEES, AND THE ENVIR

NMENT
All this is accomplished against the backdrop of our overall strategy:
EXPANSION AND INTERNATIONALIZATION OF THE PREMIUM BRAND
LOEWE
In this area, we want to achieve an additional earnings-oriented optimization of the
Loewe product program and expand our international business with growth rates of
more than 20% p.a. Higher investments in marketing and communication as well as
product presentation systems will enhance brand awareness and Loewe’s image.
FOCUSING ON INNOVATION, TECHNOLOGY, AND DESIGN
By expanding our development activities at our central location and at our new facility
in Hanover, we want to secure our technological leadership position in the home
cinema and multimedia systems sectors and the introduction of improved user interface
and networking concepts. This will be accompanied by the continued expansion
of our leading design competence.
REINFORCEMENT OF RELATIONS WITH CUSTOMERS AND SUPPLIERS
The objective of our Loewe Online campaign is to install a comprehensive e-business
solution that extends from our suppliers over our own value-added positions to our
customers. Once the new Customer Care Center (CCC) is in place, we plan to deliberately
cultivate customer loyalty, win new customers and achieve the best customer
service in the consumer electronics sector in the next few years.
Loewe views itself as a multimedia company – not only because it offers
Internet televisions, but also because of the internal orientation of our organization on
Internet-based applications. We use them for training our more than 3,000 retailers,
for viewing the production plan online, for coordinating suppliers and purchasing to
facilitate just-in-time production, for international e-commerce involving specialized
retailers, for an Intranet covering all divisions of the Company, and for a modern,
updated information base for shareholders, customers, and suppliers.
OUTLOOK FOR 2001
Loewe successfully used the year 2000 to expand its leading position in the increasingly
attractive multimedia market for consumer electronics. New products and system
solutions, as well as winning new customers to enhance profitability, will continue to
define our activities in 2001. In particular, at the international consumer electronics
fair 2001 in Berlin, we will invite visitors to review the seventy-year history of electronic
televisions by Loewe and will present a variety of new products at the same time.
The year 2000 was extraordinarily successful. The commitment of our employees
was especially instrumental in this regard, in particular with respect to the Company’s
ability to quickly and cost-effectively meet the growing demands of the markets.
Our thanks to the employees is expressly extended to the works council as well.
Loewe is well positioned for the year 2001. The expansion of sales and
another increase in the EBIT margin should lead to improved earnings. Since the capital
markets are more than volatile right now, our efforts are also focused on creating
even more respect for Loewe stock in the financial community. We would be very happy
if you continued to actively accompany us on this path.
Yours sincerely,
Dr. Rainer Hecker, Chairman of the Executive Board of Loewe AG
5 2000

2000 Loewe AG.
NEW PRODUCTS, NEW APPLICATIONS, AND THE CONSTANT IMPROVEMENT
OF PROFITABILITY WILL ALSO DETERMINE OUR ACTIONS IN 2001
DR. RAINER HECKER ON LOEWE AG’S PERSPECTIVES

2000 6 Report of the Supervisory Board. Loewe AG
PROF. DR. EBERHARD SCHEFFLER, CHAIRMAN OF THE SUPERVISORY BOARD
LOEWE LOOKS BACK ON THE MOST SUCCESSFUL YEAR IN ITS HISTORY
DEAR SHAREHOLDERS,
The Supervisory Board monitored the successful business development of
Loewe AG documented in the annual and consolidated financial statements
by maintaining constant written and verbal contact with the Executive
Board. The Supervisory Board consistently supports the overall strategy
pursued by the Executive Board in order to further strengthen Loewe’s
good competitive position. Within the context of the responsibilities incumbent
upon it in accordance with statutory regulations and the Company’s
bylaws, the Supervisory Board continuously oversaw the management of
the Company. In written and oral reports, it was regularly informed in
depth by the Executive Board on the course of business as well as the economic
position and development of the Company and the Group including
important transactions; these reports were discussed with the Executive
Board. Outside of the meetings, the Chairman of the Supervisory Board
consulted with the Executive Board on questions regarding business policy
and strategic goals as well as important individual issues and the staffing
of executive positions.
Four meetings took place in the reporting period. The current business
development was treated in these meetings, and discussions focused
on relevant sectors, basic business policy issues, the development of sales
and earnings, the employment situation, and transactions requiring
approval. In between meetings, the Supervisory Board was also informed of
projects and processes that were especially important or urgent for the
Company. In individual instances, which were discussed in depth with the
Chairman, the Supervisory Board was asked for its written approval if necessary
and appropriate.
The focus of the meeting on April 17, 2000 was on the annual and
consolidated financial statements for the year ended December 31, 1999
and the audit of same. The meeting also served to prepare for the Company’s
annual Shareholders’ Meeting. On June 29, 2000, the Supervisory
Board discussed the current business development. On the same day, the
first Annual General Meeting of Loewe AG was held in Munich. The shareholders
actively participated in the meeting and all of the items on the
agenda received their unanimous approval. In the meeting on September 7,
2000, the Supervisory Board reviewed questions relating to strategic partnerships
and the development of new business models, as well as multimedia
products. A highlight was the development of the telecom business.

In the meeting on December 8, 2000, the strategic planning for
the Loewe Group, the budget for fiscal year 2001, and the medium-term
plan until the year 2004 were discussed with the Executive Board and
approved by the Executive Board and Supervisory Board. In addition, the
Supervisory Board reviewed in depth the partial spin-off of the pension
obligations to a new subsidiary. Upon the suggestion of the Personnel
Committee, Mr. Thomas Bender was appointed as a new Member of the
Executive Board of Loewe AG effective April 1, 2001. On the same date,
Mr. Klaus Deisler resigned from the Executive Board for health reasons.
The Supervisory Board of Loewe AG would like to thank Mr. Klaus
Deisler for his many years of successful activity in the areas of marketing
and sales at Loewe. He was instrumental in promoting the strong position
of the Company with its customers and in reinforcing consumers’ high
regard for the Loewe brand.
The Personnel Committee of the Supervisory Board met twice in
the year under review. The principal subject discussed at the meetings was
Executive Board staffing, predominantly in conjunction with Mr. Deisler’s resignation,
the search for a suitable successor, and the appointment of Mr. Bender.
The Executive Board prepared the annual financial statements of
the Company for the year ended December 31, 2000 and the management
report for fiscal year 2000 in accordance with the principles of the German
Commercial Code and the German Stock Corporation Act. The consolidated
financial statements and the consolidated management report of Loewe
AG have been prepared pursuant to § 292a of the German Commercial Code
in accordance with the principles of International Accounting Standards (IAS).
Both sets of accounts were reviewed by the auditor appointed by the shareholders
at the annual meeting on June 29, 2000, Abstoß & Wolters, Wirtschaftsprüfungsgesellschaft,
Steuerberatungsgesellschaft, Mönchengladbach. The
auditor endorsed the annual financial statements and management report of
the Company and its consolidated financial statements and consolidated management
report with an unqualified auditors’ report.
The annual financial statements and management report, the consolidated
financial statements and consolidated management report, the
proposed appropriation of retained earnings, and the report of the auditors
for the aforementioned documents were presented to all Supervisory Board
members in due time before the balance sheet meeting on April 10, 2001.
The meeting was attended by the auditors, who reported on the most
important results of their review and answered or commented on questions
and remarks of the Supervisory Board.
According to the conclusive result of its own review of the aforementioned
documents, the Supervisory Board agrees with the findings
arrived at by the auditors. The Supervisory Board approves of the annual
financial statements for Loewe AG prepared by the Executive Board for the
year 2000, which can thus be considered adopted. The Supervisory Board
has approved of the consolidated financial statements and consolidated
management report.
The Supervisory Board agrees with the Executive Board’s proposal
to distribute EUR 6,220 thousand of the unappropriated retained earnings
as dividends in the amount of EUR 0.85 per bearer share in Loewe AG and
to carry EUR 206 thousand forward to the next year’s accounts.
The Supervisory Board would like to express its recognition and
thanks to the Executive Board and all employees for their successful work
in the past business year. Their responsible and committed activities and
their cooperative efforts were the basis for the best fiscal year in Loewe
AG’s history.
Kronach, April 10, 2001
Prof. Dr. Eberhard Scheffler, Chairman of the Supervisory Board
7 2000

2000 8 The Share. Loewe AG
THE LOEWE SHARE.
POSITIVE RESULTS STABILIZE SHARE PRICE IN
A WEAK MARKET ENVIRONMENT
LOEWE TAKES SECOND PLACE IN AN INVESTOR
RELATIONS SURVEY OF SMAX COMPANIES
FIRST SHAREHOLDERS’ MEETING ESTABLISHES
LOEWE AG’S STANDING AS AN INVESTOR-ORIENTED
MULTIMEDIA ENTERPRISE
The Loewe share performed well in the year 2000.
Independent of the trend of the German and European
stock indices, the Loewe share more than doubled its
value during the trading year.
STRONG PRICE UPSWING PARALLEL TO THE OVERALL
MARKET IN THE FIRST QUARTER
The year 2000 started with the share attaining its issue price of EUR 18.
At the time the key figures for 1999 were published, the share price began
to rise sharply, accompanied by high sales. By the time of the CeBIT fair at the
end of February, the Loewe share price reached a level higher than EUR 36.
This development followed the market trends, especially those in
the NEMAX, but also in the DAX and the most significant European price
barometers. By mid-April 2000, the Loewe stock consolidated to a level of
roughly EUR 24, following the general downturn of the above indices.
THE PRESENTATION OF THE ANNUAL FINANCIAL
STATEMENTS AND NEW ANALYST RECOMMENDATIONS
GENERATE DEMAND FOR THE LOEWE SHARE IN A
WEAK MARKET ENVIRONMENT
After that, the share was able to clearly differentiate itself from the
increasingly weakening general market trend. One of the causes for this
was the presentation of the annual financial statements with a confirmation
of the good figures for fiscal year 1999. Secondly, the release of
initial studies by analysts from investment houses that were not part of the
Loewe underwriting syndicate set the stage for the stable price trend that
followed.
With their clear buy recommendations, Bankgesellschaft Berlin,
Bankhaus Lampe, Hornblower Fischer and ABN AMRO created a distinct
activation of trading in Loewe shares. Moreover, there were buy recommendations
from Credit Suisse First Boston, HypoVereinsbank, Bayerische
Landesbank and Sal. Oppenheim.

44
40
36
32
28
24
20
16
12
8
4
0
The quarterly report for the first three months of the fiscal year,
which backed up the analysts’ forecasts, as well as increased presentations
to fund managers, including abroad, gave the share further support in a
persistently very weak market environment in summer 2000.
LOEWE’S FIRST SHAREHOLDERS’ MEETING STIRRED
ACTIVE INTEREST
The first Shareholders’ Meeting of Loewe AG on June 29, 2000 in Munich
was attended by more than 300 shareholders, representing just under
70% of the subscribed capital. The broadcast in the Internet and the presentation
of the mid-term growth, net income, and financial goals were
evidence of Loewe AG’s standing as an investor-oriented multimedia enterprise.
An extensive product presentation and a detailed presentation of
the operating and financial goals of the Company were widely approved by
the shareholders.
INCREASE OF ANNUAL PLANNING IN AUGUST FOLLOWED
BY NEW TOP PRICES
Up to the time the first-half figures were presented in August 1999, the
Loewe share maintained the price level of more than EUR 30. Due to the
increasing evidence of a good business trend, the forecasts for the entire
fiscal year were noticeably increased with the publication of the first-half
report. The expected sales were now predicted to be higher than EUR 348
million; the EBIT was raised to approximately EUR 20 million. Most analysts
thereupon adjusted their predictions upward and issued a buy recommendation
once more. The estimates for the anticipated earnings per share in
2000 averaged EUR 1.50. As a consequence, the share price rose noticeably
and reached a price level of EUR 39 with high trading volume. In a
persistently weak market environment, the Loewe share stabilized at EUR
34 by year-end.
SHARE PRICE IN EURO PERCENT
CeBIT
Apr. 26, 2000
Annual
Press
Conference
Jun. 29, 2000
Annual
Shareholders’ Meeting
Jan. 4, 2000 Jan. 1, 2001 Mar. 28, 2001
LOEWE SDAX NEMAX
Aug. 21, 2000
Semi-annual Report
Nov. 20, 2000
Results for the
first 9 months
Performance of LOEWE stock against SDAX and NEMAX, Jan. 1, 2000 through Mar. 31, 2001
Jan. 22, 2001
Key Figures
for 2000
Mar. 22,
2001
CeBIT
275
250
225
200
175
150
125
100
75
50
25
0
9 2000

2000 10 The Share. Loewe AG
INVESTOR RELATIONS DISTINCTIONS
In an investor relations competition conducted by the German financial
magazine Capital, Loewe AG took second place in its market segment
SMAX. The results were based on a survey of 1500 financial analysts
and fund managers registered with DVFA. In a review of investor relations
websites conducted by the German business magazine Wirtschaftswoche,
Loewe AG attained first place in the SDAX. Overall, more than 400 German
stock corporations listed on the stock market were reviewed according
to 91 different criteria. Among all German securities, Loewe
took fifth place in the study.
in EUR million 2000 1999 +/– in%
Net output
thereof
74.4 61.9 + 20
Employees (personnel expense) 52.8 48.8 + 8
Government (tax expense) 8.5 4.7 + 81
Creditors (interest expense)
Company/shareholders
1.1 3.1 – 65
(net income) 12.0 5.3 + 126
Net output
The breakdown of net output demonstrates the higher equity ratio
and the improved results.
SHARE SALES THE HIGHEST IN FRANKFURT
The Loewe share is actively traded every trading day on all German stock
exchanges and in XETRA computer trading. The sales are the highest on
the Frankfurt Stock Exchange and in XETRA, followed by Munich and
Düsseldorf. Designated sponsors are Credit Suisse First Boston and
HypoVereinsbank.
Generally, price increases have always been associated with noticeably
higher trading activity than subsequent price consolidations. Loewe
AG participates in a working group of the Deutsches Aktieninstitut DAI
(German Stock Institute) whose goal is to bring about greater awareness of
second and third tier securities, in addition to DAX and Nemax, in the
financial public and among institutional investors.
SHAREHOLDER STRUCTURE
In fiscal year 2000 and until March 2001, Loewe AG has received no new
notifications pursuant to § 21 WpHG (Wertpapierhandelsgesetz – German
Securities Trading Act). From this, it is possible to estimate that the approximate
number of widely held shares of the 7,075,000 listed shares is roughly
52 %. At 34 %, management is the single largest shareholder. Several
large German mutual funds reported holding Loewe shares in their portfolios
at year-end 2000. Beyond that, there are no known large-lot holdings
in the market. At the time of the Shareholders’ Meeting in June 2000,
more than 18,000 German individual securities accounts were notified
according to § 125 AktG (Aktiengesetz – German Stock Corporation Act).

in EUR 2000 1999 +/– in%
Dividend per share 0.85 0.0
High 39.75 18.00 + 121
Low 15.00 12.00 + 25
Closing price (Dec. 31)
Market capitalization
30.00 15.20 + 97
(on Dec. 31 in million euro) 212 108 + 97
Number of shares outstanding
(bearer shares at no par value)
7,075,000 7,075,000
Loewe stock key figures
CORPORATE GOVERNANCE
The compensation of the Executive Board and downstream managementexecutive
tiers is tied to the attainment of agreed personal and net income
related targets. The existing stock option program may be exercised by a
total of 80 eligible employees of the first three management tiers by the
year 2005 in four tranches within narrowly defined time windows. The
Chairman of the Supervisory Board is in constant contact with the Executive
Board and receives monthly reports on the development of the Company.
If the corporate governance recommendations presently being discussed
take on a more concrete form, they will also be recognized by
Loewe AG. They have already been implemented today, for instance, in the
interaction of the Executive Board and Supervisory Board.
in EUR thousand 2000 1999 +/– in%
Consolidated net profit before
minority interests
Adjustment for extraordinary items
12,317 5,350 + 130
(mainly IPO costs)
Consolidated DVFA/SG earnings
0 2,868
before minority interests 12,317 8,218 + 50
Minority interests
Consolidated DVFA/SG earnings
– 279 – 46 + 507
after minority interests
Total number of
12,038 8,172 + 47
shares outstanding 7,075,000 7,075,000
DVFA/SG earnings per share
Fully diluted DVFA/SG earnings per
share including 500,000 stock
1.70 1.16 + 47
options (until 2005) 1.59 1.08 + 47
DVFA/SG earnings
11 2000

2000 12 Key events. Loewe AG
THE KEY EVENTS IN A SUCCESSFUL YEAR
LAS VEGAS
At the high-profile Consumer Electronics
Show (CES) in Las Vegas, Loewe presents
the very latest television technology for
the American market.
HANOVER
At CeBIT 2000, the redesigned
Loewe trade fair stand is a tremendous
public draw. The new Loewe
telephones and multimedia televisions
are the focus of the Loewe
presentation.
KRONACH
Loewe agrees a cooperation with
the company RWE Energie AG with
respect to equipping the Powerline
Communication Demohouse. The
Loewe multimedia television
accesses the Internet through the
mains power supply network.
KRONACH
Partnership with 3Com: Loewe uses
the 3Com modem to connect to the
Internet via the broadband cable
network.
KRONACH
Exclusivity is not a question of size:
Loewe launches the new small television
Arcada 8755 Z. It offers
everything in the 55cm screenclass
that distinguishes top televisions.
KRONACH
Loewe launches a new publicity
campaign with the French singer
Patricia Kaas, US author John Irving
and the managing director of the
Viva TV channel, Dieter Gorny.
Campaign features, inter alia, in
the magazines Spiegel, Stern,
Focus, Manager Magazin and
Tomorrow.
MUNICH
Loewe reports record results for
fiscal 1999 at the Annual Press
Conference in Munich.
NEW YORK
Presentation at the Euroland Equity
Forum held at the World Trade Center.
JANUARY FEBRUARY MARCH APRIL MAY JUNE
KRONACH
Loewe joins the foundation initiated
by German industry thereby
agreeing to contribute to the fund
set up to compensate forced industrial
laborers deployed during the
“Third Reich”.
HANOVER
Loewe is present at the Expo 2000
world fair in the agenda houses, as
well as in the design show of the
Industrial Forum Design Hanover.
MUNICH
Over 300 shareholders of Loewe
AG meet at the Arabella Sheraton
in Munich for the first general
meeting.
MUNICH
Loewe signs a partnership agreement
with the Institute of Broadcasting
Technology (IRT) in Munich.
This concerns the field of future
standard solutions for digital
television.
LONDON
Loewe shows its international
profile at a roadshow organized by
Cazenove & Co.

KRONACH
The Bavarian Minister of Trade and Commerce,
Dr. Otto Wiesheu, formally opens
a state-of-the-art production plant for
TV units in Kronach. The new assembly
line has a capacity of 1,600 televisions
per day and offers up to 30% greater
operating efficiency.
MUNICH
The Bavaria Online Congress focuses on
the trends of tomorrow. In addition to
Loewe, the organizers include companies
such as Microsoft, Deutsche Telekom,
SAP, Siemens, Oracle and Alcatel.
KRONACH
Loewe launches its new Intranet as the
Company-wide information and communications
system.
FRANKFURT
One of ten design Oscars goes to Loewe
and Team Phoenix Product Design. The
plasma TV Spheros is given Germany’s highest
design award, the Bundespreis Produktdesign
(German Award for Product Design).
AMSTERDAM/LONDON
Another successful roadshow is organized by
Credit Suisse First Boston (Europe) Ltd. and
ABN AMRO.
KRONACH
Bavaria’s Environment Minister,
Dr. Werner Schnappauf, presents the
Ecological Audit Certificate. Loewe AG
and its subsidiaries Loewe Opta and
Loewe Telecom fulfill the requirements
of the EU Ecological Audit Ordinance.
BERLIN
Direct link between TV and the Internet:
during a press conference held at the
ZDF studios in the German capital,
Loewe unveils the project “Internet
Address Recognition”, developed in conjunction
with ZDF. Via the remote control,
the new multimedia televisions can
automatically recognize the Internet
pages belonging to a particular broadcast.
FRANKFURT
Loewe wins second place in the SDAX
category on the occasion of the Investor
Relations Award sponsered by the magazine
Capital. Some 1,500 analysts
selected the winner.
KRONACH/OSAKA
A new cooperation between Sharp and Loewe in the
field of LCD televisions benefits from the combination
of Sharp’s display technology and Loewe’s know-how
in the areas of operator prompting, multistandard
tuners and European videotext systems.
KRONACH
Loewe is chosen “top brand” in the television segment
by the readers of the specialist information service
“markt intern” – as the company which offers the best
combination of product quality, value-for-money and
innovation. At the same time, the television Planus is
voted the most popular model.
KRONACH
The new, innovative television family Vitros from Loewe
sets design and technological accents with the multimedia-capable
electronics Loewe MediaPlus and the
Real Flat picture tube.
KRONACH
Turning vision into reality:
Loewe launches the
new, superflat LCD television
FL 38 on the market.
JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
MUNICH
The Bavarian Ministry of the Environment awards Loewe
the Bavarian Environment Medal.
HAMBURG
“ambiente@home – inspired by Loewe” is the name of a
domestic design studio at the Loewe Gallery Hamburg
which Loewe has established in conjunction with selected
furniture manufacturers and object designers. Across an
area of 120 square meters, visitors find interaction between
furniture design and consumer electronics.
HANOVER
Loewe opens the Software-Kompetenzzentrum (Center for
Software Know-how in Hanover to develop multimedia
Internet software).
BERLIN
Loewe exhibits modern networking technology at the
congress trade fair e/home. The television becomes the
focal point of the electronically-wired house.
13 2000

2000 14

From any angle a good year. Loewe.
A year has 365 days. We have spent most of that time making 365 good
days out of it. Days full of movement, ongoing development, and success.
For we’re not just demanding as far as our products are concerned, we’re
at least as demanding in our goals. That is why today we’re the market
leader in premium system solutions. It’s nice at the end of a year to be able
to look back in satisfaction at each individual day.
15 2000

2000 16 Management Report. Loewe AG
MANAGEMENT REPORT.
SIGNIFICANT GROWTH IN LOEWE’S MOST IMPORTANT
MARKETS
ADDITIONAL EXPANSION OF LOEWE’S MARKET POSITION
IN EUROPE
IMPROVED PROFITABILITY THROUGH CONCENTRATION
ON HIGH-END PRODUCTS
GOOD START IN 2001, FAVORABLE OUTLOOK CONTINUES
Loewe achieved new record highs in sales and earnings in
fiscal year 2000. In a favorable market environment, the
Company was able to significantly expand its positioning as
a high-end brand with innovative multimedia products. As
a result, a solid basis was formed for continued profitable
growth.
UNDERLYING ECONOMIC CONDITIONS
POSITIVE ECONOMIC DEVELOPMENT IN THE YEAR 2000
The underlying economic conditions in 2000 were better than in the year
before. The world economy grew 4.2 % after only 3 % in 1999. The driving
force was the USA, where growth reached 5.1 % after 4.2 % in the
previous year. But in the second half of the year, the growth declined by
more than half.
The economic development was favorable in the euro zone as well
in the year 2000. The growth rate here was 3.4 % after 2.5 % in 1999.
Here too, however, the growth in the second half of the year was slightly
slower than in the first six months. The growth of the year 2000 was driven
by investments in equipment and export. The unemployment rate was
down as well.
The development of private consumption was less pleasing since it
remained below average. The moderate growth of the first six months
became even weaker in the second half of the year.
The persistent weakness of the euro promoted export. But together
with the oil price explosion, above all in the second half of the year, it
led to a significant rise in consumer prices. In the fourth quarter, they were
2.7 % higher than in the previous year.

With a growth rate of 3.1 %, the economic development in
Germany was somewhat weaker in the past year than the average growth
in the euro zone. But in comparison to the previous year’s growth, which
was only 1.6 %, the economic development improved considerably.
Here, too, the driving forces were investments in equipment and exports.
The growth rate of private consumption still lagged behind the rate in the
euro zone.
PROJECTIONS FAVORABLE FOR 2001
The projections for the growth of the world economy in 2001 are less optimistic
than for the year 2000. Experts predict a growth rate of 3 %, down
from 4.2 % in the year 2000. The US economy could change from a driving
force to an obstacle. Its growth rate is expected to falter
to 2.5 % after 5.1 % in the previous year. The euro zone, on the other
hand, is viewed as relatively stable. Growth is forecast to drop slightly to
3.2 % after 3.4 % in 2000. In the Federal Republic of Germany, growth is
expected be 3.0 %, barely changing since the previous year. On the cost
side, the decline in oil prices over the previous year and a stronger euro
will have a positive effect.
The higher euro rates will hardly affect export in the euro zone,
but it will lose some of its dynamics. This will be offset by private consumption,
which will gain momentum as a result of declining inflation
rates and in part as a result of tax reforms.
In our estimation, the underlying economic conditions should be
viewed as favorable for the continued development of business for the
Loewe Group.
17 2000

2000 18 Management Report. Loewe AG
LOEWE’S MARKETS
THE CONSUMER ELECTRONICS MARKET
STRONG GROWTH
Europe is the most important market for Loewe. The business volume in
the Far East and overseas was below 10% of total sales.
The European market for consumer electronics grew to EUR 33.6
billion in the past year. This figure is based on the value of sales to end
consumers and represents an increase of about 9%.
Loewe is represented in about two thirds of the entire market
volume with televisions including multimedia units and DVD players, video
recorders, and stereo systems. In these segments, the market grew by a
total of 8%.
in EUR billion 2000 1999 +/– in %
Televisions 11.0 10.2 + 7
DVD players 1.3 0.6 + 142
Video recorders 3.0 3.3 – 9
Stereo systems 5.9 5.6 + 5
Subtotal 21.2 19.7 + 8
Audio, video
games, etc. 12.4 11.1 + 12
Total 33.6 30.8 + 9
Consumer electronics market in Europe
(Source: GfK)
TELEVISION: GOOD BUSINESS
The television product group is the largest source of sales at Loewe. It
comprises about 80% of the Company’s total business volume. This product
group also includes multimedia-capable televisions. The market for
televisions recorded very high growth in 2000 at 7%. For the first time in
many years, growth in value surpassed volume growth, which in 2000
had been 5%. What prompted this development is the trend toward larger
units with more features. At the same time, the market accepted that
the higher costs arising from the oil and components shortage were
passed on to sales revenues.
In the past year, Loewe was able to expand its consumer electronics
market share in Europe in terms of value from 6.3% to 6.7%.* As a
result, Loewe is the fifth largest player in the European market. The gain in
market share was achieved by concentrating on products with high-end
features.
* Source: GfK, Market share in terms of value for Europen retail market in
the period from February 2000 to January 2001

LOEWE FOCUSES ON GROWTH MARKETS
The market for televisions in Europe is divided into several segments on
the basis of different features. Among others, these features include the
type of screen technology, the screen size, the screen format, and further
characteristics such as multimedia capability. Because the market volume
for them is still fairly low, there are as yet no statistics available for multimedia
sets.
in EUR billion 2000 1999 +/– in %
100 Hz technology 3.7 3.1 + 19
50 Hz technology
Unrecorded
6.2 6.2 + 1
volume 1.1 0.9 + 22
Total 11.0 10.2 + 7
16 : 9 wide
screen format
4:3
3.6 2.6 + 41
standard format
Unrecorded
6.4 6.7 – 5
volume 1.1 0.9 + 22
Total 11.0 10.2 + 7
Screen size less
than 68 cm
Screen size
between 68 and
3.3 3.5 – 7
72 cm
Screen size larger
4.5 4.3 + 7
than 72 cm
Unrecorded
2.1 1,5 + 41
volume 1.1 0.9 + 22
Total 11.0 10.2 + 7
Television market in Europe by segment
(Source: GfK)
Sets based on 50 Hz technology and sets with smaller screen
sizes (under 50 cm) did poorly in the period under review. Sales in these
segments either stagnated or declined. In addition, price competition
was fierce. Loewe only has few products in these segments. Accordingly,
Loewe’s market share is below average here.
Loewe concentrates on products in growth segments. The segment
for units based on 100 Hz technology is especially successful. This technology
produces a flicker-free image, unlike 50 Hz units. About 37% of all
units sold were in this sector in the year 2000, after 33% in 1999. Loewe’s
market share was 13.9%. This means, Loewe holds the third place in
Western Europe in this market.
19 2000

2000 20 Management Report. Loewe AG
in % 2000 1999 +/–
100 Hz technology 13.9 14.0 – 0.1
50 Hz technology 1.3 1.5 – 0.2
Total 6.7 6.3 + 0.4
16 : 9 wide
screen format
4 : 3 standard
7.1 6.5 + 0.6
format 6.2 6.1 + 0.1
Total 6.7 6.3 + 0.4
Screen size less
than 68 cm
Screen size
between 68 and
3.3 3.1 + 0.2
72 cm
Screen size larger
7.3 7.6 – 0.3
than 72 cm 8.9 8.5 + 0.4
Total 6.7 6.3 + 0.4
Loewe television market shares in Europe by
segment (Source: GfK, Retail markets)
The segment for 16:9 format televisions experienced tremendously
dynamic development in the year 2000. In contrast to the conventional
format, 16:9 format makes it possible to view cinema films without the
annoying black bar at the top and bottom of the image. Growth in this
segment was at 41%. The United Kingdom was one of the driving forces
in this trend, but the sets sold there were primarily based on the cheaper
50 Hz technology. Even though Loewe exclusively offers units with highend
features, it was able to increase its market share from 6.5% to 7.1%.
In this promising sector, Loewe holds the fourth place in Western Europe.
Units with large screen sizes of over 72 cm were also very much in
demand in 2000. Here, too, the growth in the United Kingdom was primarily
limited to sets based on 50 Hz technology. Loewe only offers wide
screen sets using the superior 100 Hz technology. Nonetheless, Loewe
increased its market share in this area from 8.5% in 1999 to 8.9% in
2000. Here, too, it is in the fourth place.
LOEWE ADVANCES EUROPE-WIDE
More than 80% of the total market volume was generated in the five
largest markets, Germany, the United Kingdom, France, Italy, and Spain.
In these markets, the volume rose by 7%. Growth was higher than average
in the United Kingdom at 19%, average in Italy, and below average in
France, Spain, and Germany.

in EUR billion 2000 1999 +/– in %
Germany 2.5 2.5 + 1.0
United Kingdom 2.4 2.0 + 18.9
France 1.6 1.5 + 3.9
Italy 0.9 0.9 + 7.0
Spain
5 largest
0.9 0.8 + 2.8
countries, total 8.3 7.7 + 7.1
Rest of Europe 2.7 2.5 + 8.3
Total Europe 11.0 10.2 + 7.3
Television market in Europe by country
(Source: GfK)
Loewe was able to maintain its market share in Germany, the
largest market in Europe. In Italy, Spain, and the United Kingdom, Loewe
was able to expand its market position.
In the medium-sized and small European countries, the total market
volume grew by 8%. Growth was especially strong in Sweden at 18%
and in the Netherlands at 11%. In the year 2000, Loewe succeeded in
improving its strong market position in Belgium, Switzerland, and the
Netherlands, where it has a market share of about 10% respectively.
Loewe’s market share for plasma televisions in Germany is nearly
30%. This means, Loewe is the second largest supplier in this segment.
Since they retail at more than DM 20,000, these units only appeal to a
small and discriminating consumer group. Loewe recognized this category
of consumer early on and already entered the market in 1998 with the
first units of this type.
LCD televisions were new to the market in the year 2000. In
December, Loewe launched the first product in this market, a result of its
partnership with Sharp. The market is still very small but characterized
by very dynamic development. In the past, LCD technology was only used
for PCs.
In comparison to the competition, Loewe was able to further
improve its price level. Due to a stable pricing policy and sophisticated features,
the average price of Loewe units in Germany was EUR 602 above
the average market price at EUR 1,090 per set in 2000, after EUR 1,065 in
1999.
in % 2000 1999 +/–
Germany 13.8 13.9 – 0.1
Spain 6.4 4.7 + 1.7
Italy 5.8 4.4 + 1.4
France 1.3 1.1 + 0.2
United Kingdom
5 largest
countries by
0.9 0.5 + 0.4
market volume 6.2 6.0 + 0.2
Rest of Europe 8.5 7.5 + 1.0
Total Europe 6.7 6.3 + 0.4
Loewe TV market share in Europe by country
(Source: GfK, Retail markets)
21 2000

2000 22 Management Report. Loewe AG
DVDS, VIDEO RECORDERS, AND STEREO SYSTEMS
Loewe offers a broad range of high-end consumer electronics. The emphasis
is on televisions. DVD players, video recorders, and stereo systems can
be added for a system with a uniform design and an integrated user interface.
The market for video recorders in Europe slowed down in the past
year. The market volume decreased by 9%. Prices dropped. In contrast, the
market for DVD players experienced dynamic growth of more than 140%.
Over the longer term, DVD players will replace VCRs.
Pricing has been a decisive factor for VCRs in the past few years.
Loewe pursued a different strategy here and did not expand its market
shares in this segment. Instead, Loewe concentrates on offering consumers
easy-to-use and functional video recorders.
Loewe’s high-end stereo systems only appeal to a small consumer
group. Accordingly, the market shares realized in 2000 were negligible.
THE MULTIMEDIA MARKET
TREND OF THE FUTURE: MULTIFUNCTIONAL UNITS
The trend toward media convergence is unstoppable. Computers, telephones,
and televisions are gradually being combined. Media convergence
is affecting all consumer equipment in the PC, telecommunications
technology and consumer electronics segments. Televisions are increasingly
used as platforms for accessing the Internet. This trend will take off if
additional television broadcasters establish a direct link between TV and
Internet contents.
Loewe’s multimedia products are designed with the trend toward
media convergence in mind. For example, among other features, its
multimedia televisions offer integrated access to the Internet. In addition,
viewers can, via the DVB module, receive digital television programs broadcast
over satellite.
When it comes to media convergence, Loewe is pursuing the modular
integration of additional functions in the television set. In contrast, the

market primarily offers separate set top boxes, which as an external unit
allow users to receive digital satellite programs or to access the Internet
through their television sets. Loewe’s product policy is creating a new and
unique market segment: the multimedia television.
The market for multimedia televisions is still small at this point,
which is why market research institutions do not record separate statistics.
Therefore, no quantitative market statistics are available as yet for this segment.
THE TELECOMMUNICATIONS MARKET
TREND TOWARD HIGH-END UNITS
To date, Loewe’s telecommunications division has only been active in
Germany. The first sales in European markets outside Germany were not
generated until the fourth quarter with a new product line.
The market for telecommunication products grew 10% in the year
2000 in terms of value. In this segment, the growing demand for replacements
is especially noticeable. The products’ design and features play a
more important role than in the past.
The market in Germany for cordless telephones was characterized
by higher volume growth than growth in value in the year 2000 as a result
of lower average sales.
The most important supplier in the market for cordless phones still
controls the market with two brands and a market share of about 70%. In
this segment, Loewe is in the third place with a 7% market share.
In the answering machine segment, the market volume declined in
the year 2000. Loewe was able to expand its market share from 33% to
44%.
in EUR million 2000 1999 +/– in %
Cordless phones,
DECT standard
Answering
281 252 + 10
machines 19.4 24.4 – 21
Telecommunications market in Germany
(Source: GfK, Specialist retail trade)
in % 2000 1999 +/–
Cordless phones,
DECT standard
Answering
7.1 5.7 + 1.4
machines 44.3 33.2 + 11.1
Loewe market share in German telecommunications
market (Source: GfK, market share in specialized
retail according to sales)
23 2000

2000 24 Management Report. Loewe AG
POSITIVE ECONOMIC DEVELOPMENT
OF LOEWE
KEY PERFORMANCE INDICATORS SIGNIFICANTLY IMPROVED
Consolidated sales rose 17% from EUR 309.5 million to EUR 363.6 million.
Earnings before interest and taxes (EBIT) increased 22% from DM 17.9 million
to EUR 21.9 million. We are proposing a dividend of EUR 0.85 per
bearer share to the shareholders of Loewe AG.
in EUR million 2000 1999 +/–
Sales 363.6 309.5 + 54.1
Manufacturing costs – 269.3 – 231.5 + 37.8
Selling expenses – 63.5 – 52.3 + 11.2
Administrative expenses – 10.7 – 9.5 + 1.2
Other operating income 1.8 1.8 0.0
EBIT 21.9 18.0 + 3.9
Interest income/expenses – 1.1 – 3.1 + 2.0
Operating result 20.8 14.9 + 5.9
Extraordinary result 0.0 – 4.8 + 4.8
Income taxes
Consolidated net income before
– 8.5 – 4.7 + 3.8
minority interests 12.3 5.4 + 6.9
Fiscal year 2000 was very successful for the Loewe Group. Supported
by the stable development of the economy on the whole, the high
demand for Loewe products, above all in the television and multimedia
units sector, led to an increase in sales that was significantly above the
market average. The consumer electronics division was able to improve its
sales by 4% from EUR 278.5 million to EUR 288.8 million. The multimedia
division’s sales were eight times as high as in 1999, reaching EUR 50.9 million
after EUR 5.8 million. This pleasing development reflects the fact that
the market received multimedia-capable televisions very favorably. The
delayed delivery of new telecommunications products led to a decline in
sales in this sector by 5% to EUR 23.9 million after EUR 25.2 million in the
previous year.
Loewe was able to substantially strengthen the earning power of
the Company in the year 2000. EBIT rose at an above-average rate of 22%
to EUR 21.9 million from EUR 18.0 million. As a consequence, the EBIT
margin reached 6% of sales (1999: 5.8%).

On January 22, 2001, Loewe announced that its EBIT for the
2000 fiscal year was approximately EUR 21 million (DM 41 million). EBIT
recorded in the financial statements is EUR 0.9 million higher than
this amount since beginning at year-end 2000 the interest portion of EUR
0.9 million has been recorded under allocations to pension reserves as
an interest expense. As a result, EBIT improved by the same amount. The
previous year’s figure of EUR 17.0 million (DM 33.3 million) was also
adjusted to EUR 18.0 million.
These earnings are to be used to reinforce the financial strength
of the Company and for distributing dividends to the shareholders. The
proposed dividend is EUR 0.85 plus EUR 0.36 per share as a tax credit for
German shareholders who are subject to unrestricted taxation. The earnings
per share amounted to EUR 1.70, almost 50% higher than in 1999.
In consideration of the 500,000 stock options, the earnings per
share are diluted to EUR 1.59. A first tranche of 125,000 stock options can
be exercised as of the end of August 2001.
GROWTH IN SALES INCREASED AGAIN
in EUR million 2000 1999 +/– in%
Consumer electronics 288.8 278.5 + 4
Multimedia 50.9 5.8 + 778
Telecommunications 23.9 25.2 – 5
Total sales 363.6 309.5 + 17
Sales by division
After the growth in sales amounted to 9% in 1999, sales increased by
17% in fiscal year 2000 to EUR 363.6 million.
The multimedia division played a significant role in the growth in
business volume. While only the Xelos line was available for the entire year
1999 and the Aconda line was not introduced until the last months of the
year, additional product lines were equipped with the MediaPlus Chassis in
2000 and as a consequence became multimedia-capable. Due to this
expansion of the product range, sales were nearly eight times higher than
in 1999 and reached EUR 50.9 million.
25 2000

2000 26 Management Report. Loewe AG
Despite the planned substitution effects between the multimedia
and consumer electronics divisions, sales from the television product segment
were up 2%. The increase predominantly resulted from the strong
growth in foreign business.
In both divisions, bottlenecks in the availability of goods prevented
the realization of additional sales potentials.
In the product areas DVD players, video recorders, stereo systems,
and accessories, which are part of the consumer electronics division, sales
rose 12%. The drop in video recorder sales was more than compensated
by a growth in sales of DVD players.
In the telecommunications division, sales were down 5% since the
previous year. The decline was a result of bottlenecks in components supply
in the first half of the year and startup delays for new products in the
second half of the year.
in EUR million 2000 1999 +/– in%
Germany 211.8 198.5 + 7
Foreign 151.8 111.0 + 37
Sales by region
The 7% growth in Germany was predominantly achieved with the
success of multimedia-capable televisions. Due to problems with the
availability of goods, the Company was not able to take full advantage of
the existing growth potentials.
Outside Germany, Loewe once again grew significantly faster than
the market on the whole. Foreign sales were up 37% to EUR 151.8 million.
As a result, the Company took another step forward in its strategic
target of utilizing existing sales potentials in other countries.
The largest growth was in countries where Loewe has only been
present for a few years, such as Norway and Sweden, and in the United
Kingdom.
In Australia, sales climbed 45% to EUR 10.1 million. This market,
where Loewe has already been present for many years, grew at an aboveaverage
rate in 2000 due to the Summer Olympic Games.
In the US market, 71% more Loewe televisions were sold to consumers
than in the year before. Due to high inventories of American distribution
partners and their limited financial strength, however, deliveries in
the USA were EUR 2.5 million lower than in 1999.
Since sales are predominantly focused on the euro zone and the
other export transactions are almost exclusively billed in German marks,
there are no direct currency translation risks associated with the Company’s
foreign business.

in EUR million 2000 1999 +/– in%
Benelux countries 39.2 31.6 + 24
Italy 27.1 19.3 + 40
Spain 21.4 14.5 + 48
Switzerland 9.8 7.5 + 31
United Kingdom 8.7 4.1 + 112
France 7.6 5.3 + 43
Subtotal 113.8 82.3 + 38
Other European countries 24.4 15.7 + 56
Non-European countries 13.6 13.0 + 5
Total foreign sales 151.8 111.0 + 37
Sales by country
In addition to the strong volume growth in sales, a substantially
improved product mix was achieved by concentrating on high-end equipment.
At the same time, sales prices were largely kept constant.
In some cases it was even possible to increase them since important purchased
goods became more expensive in the year 2000. Loewe was thus
able to maintain its price position above the comparable competition and
in part was able to expand it.
INCREASE IN MANUFACTURING COSTS LOWER THAN
AVERAGE
2000 1999 +/–
Costs in EUR million 269.3 231.5 + 37.8
Costs as a percentage of sales 74.1 74.8
Manufacturing costs
The worldwide shortage of electronic components not only triggered disruptions
and losses in production, but in the course of the year also led to
a noticeable increase in purchase prices. The strong rise in oil prices had
the same effect. Parts made of plastic, above all in the design area, became
considerably more expensive. In addition, there were wage scale increases
that affected personnel expenses.
27 2000

2000 28 Management Report. Loewe AG
These negative influences on unit costs were compensated with a
higher utilization of existing capacities. In addition, in the second half of
the year rationalization effects from investments already made became
effective. Capacities were stepped up and processes were simplified with
the new final assembly line in production and the new automatic placement
machines.
HIGHER SELLING EXPENSES
2000 1999 +/–
Costs in EUR million 63.5 52.3 + 11.2
Costs as a percentage of sales 17.5 16.9
Selling expenses
The rise in marketing costs was above average at 21%. Of the total
increase, EUR 9.8 million were related to advertising costs and freight and
EUR 3.0 million to costs of the sales and marketing organization. Other
selling expenses were lower by EUR 1.6 million.
Advertising costs were EUR 6.8 million higher than in the previous
year and reached EUR 23.1 million. The above-average rise of 42 % in
expenditures concentrated on perceptibly improving the positioning of the
Loewe brand from the consumers’ perspective. This included measures
such as the international image campaign with testimonials and sponsoring
commitments. Individualized contact with end consumers is to be established
with the customer magazine Touch, which has a circulation of
45,000 copies. The online information platform Loewe Händler-Service was
expanded with another component for individual customer contact. The
presentation systems for the trade were also used in Loewe’s foreign markets.
Freight costs rose at an above average rate of EUR 3.0 million to
EUR 10.1 million in 2000 due to higher freight prices, above all as a result
of the increase in oil prices. In 2000, freight costs represented 2.8% of
sales after 2.3% in the previous year. Moreover, additional costs arose
from efforts to improve the quality and speed of shipping. As a consequence
of the bottlenecks in supply, cost-intensive individual deliveries
had to be made more frequently.
BELOW-AVERAGE INCREASE IN ADMINISTRATIVE EXPENSES
2000 1999 +/–
Costs in EUR million 10.7 9.5 + 1.2
Costs as a percentage of sales 2.9 3.1
General administrative expenses

The increase in administrative expenses by EUR 1.2 million to EUR 10.7 million
was predominantly a result of the expansion and intensification of
public relations and investor relations as well as consulting and other thirdparty
services connected with the strategic development of the Company.
OTHER OPERATING RESULTS UNCHANGED
Balance of operating income and
The balance of other operating income and expenses remained unchanged
from the previous year at EUR 1.8 million.
The other operating income includes EUR 3.0 million in receivables
and rental income, EUR 1.8 million in public subsidies for development
projects, and EUR 3.7 million in income from the release of reserves. The
other operating expenses contain EUR 4.7 million in costs for other receivables,
rental income, and public subsidies and EUR 3.6 million from the
release of reserves as well as other operating expenses.
INTEREST EXPENSES IMPROVED
2000 1999 +/–
expenses in EUR million
Balance of operating income and
1.8 1.8 0
expenses as a percentage of sales 0.5 0.6
Other operating income, other operating expenses, income from
affiliated companies
2000 1999 +/–
Balance of interest expenses and
income in EUR million
Balance of interest expenses and
– 1.1 – 3.1 + 2.0
income as a percentage of sales – 0.3 – 1.0
Excess of interest expenses over interest income
The balance of interest expenses and income was EUR 2.0 million lower
than in the previous year at EUR 1.1 million.
The interest income of EUR 0.9 million from investments in shortterm
fixed deposits and securities was offset by interest expenses in the
amount of EUR 2.0 million. The expenses related to bank loans and loans
from Loewe Opta Unterstützungskasse e.V. EUR 0.9 million reflected the
interest on amounts allocated to pension reserves.
The annual compounding of interest on pension reserves is now
recorded as interest and now longer as part of personnel expenses. This
means, the operating result is no longer affected by interest expenses for
pension reserves. The previous year’s figures were adjusted accordingly.
29 2000

2000 30 Management Report. Loewe AG
THE DIVISIONS AT LOEWE
CONSUMER ELECTRONICS, MULTIMEDIA, AND
TELECOMMUNICATIONS
The operating activities of the Loewe Group are handled by the divisions
consumer electronics, multimedia, and telecommunications. The largest
division, consumer electronics, encompasses televisions, DVD players, video
recorders, stereo systems, and accessories. The multimedia division was
founded in 1998 in order to focus distinctly on the newly emerging multimedia
television market segment. The telecommunications division has sold
telephones and answering machines for more than ten years now. In the
last two years, the products were positioned noticeably higher and the
product range began to concentrate on cordless DECT telephones and
answering machines.
The television product area and the multimedia division consist of
development, production, and sales. To round off the product program,
mono televisions, DVD players, video recorders, stereo systems, accessories,
and products of the telecommunications division were outsourced. Loewe
defines the performance characteristics and the design of these products
and then markets them. Moreover, Loewe ensures that the resulting products
complement each other as systems and are distinguished by ease of
use.
Despite the dynamic growth of the multimedia division, the consumer
electronics division is still dominant.
Since the introduction of the MediaPlus Chassis, which is installed
in many of Loewe’s high-end televisions, the two divisions have gradually
begun to merge with each other. The two divisions will become closer as
televisions move more distinctly in the direction of multimedia units.
DYNAMIC GROWTH FOR CONSUMER ELECTRONICS
AND MULTIMEDIA
in EUR million 2000 1999 +/– in%
Sales 339.7 284.3 + 19
EBIT (earnings before interest and taxes) 22.3 18.5 + 21
EBIT as a percentage of sales 6.6 6.5
Operating profit 21.3 15.6 + 36
Investments 23.0 18.2 + 26
Net assets 69.4 56.6 + 23
Employees 1,077 1,054 + 2
Consumer electronics and multimedia divisions
The consumer electronics and multimedia divisions already make the
largest contribution to sales and earnings. Due to the attractive prospects
of these sectors, especially the multimedia division, there is a deliberate
emphasis on investing in these divisions.

SALES INCREASE BY DOUBLE-DIGIT PERCENTAGE RATE
AGAIN
in EUR million 2000 1999 +/– in%
Televisions 238.1 233.1 + 2
Multimedia televisions 50.9 5.8 + 778
Televisions and multimedia units 289.0 238.9 + 21
DVD players 6.0 0.0 –
Video recorders 14.5 19.2 – 24
Stereo systems 3.9 2.2 + 77
Accessories 26.3 24.0 + 10
Total sales 339.7 284.3 + 19
Sales in the consumer electronics and multimedia divisions
Sales were improved by 19 % over the previous year in the consumer
electronics and multimedia divisions. By far the majority of the growth was
realized in the television product segment including multimedia-capable
televisions. The persistently dynamic development of sales outside Germany
was especially instrumental here.
In the television division, Loewe has been successfully concentrating
on the high-grade segment for some time now. The strongest market
growth is in the area of 100 Hz technology, wide screen format, and large
screen units with screen sizes over 72 cm. While units with 50 Hz technology
and conventional 4:3 screen formats still dominate the market, they will
increasingly lose significance. Loewe is already very well positioned in the
growth segments. In the year 2000, it was once again possible to improve
the sales structure in favor of the high-end segments: 89% of the units
sold by Loewe are now equipped with flicker-free 100 Hz technology. The
share of units with the promising wide screen format 16:9 rose 9 percentage
points in 2000 to 42%. The share of large screen units was up 7 percentage
points to 37%. Many of these high-end units are multimediacapable,
meaning they offer access to the Internet or the reception of digital
satellite programs. The share of multimedia-capable units rose from 2%
in 1999 to 17% in 2000.
in % 2000 1999 +/–
Sales of televisions and multimedia units
Of which:
100 100
100 Hz technology 89 84 + 5
Wide screen format 16:9
Large screen units with screen sizes
42 33 + 9
over 72 cm 37 30 + 7
Multimedia-capable units 17 2 + 15
Share of segments in sales of television and multimedia units
31 2000

2000 32 Management Report. Loewe AG
The bottlenecks in supply that arose above all in the first six
months had an adverse effect on the Company’s ability to take better
advantage of sales potentials. Due to the worldwide shortage of electronic
components and the rise in oil prices, purchasing prices for components
and design parts made of plastic escalated markedly in 2000. As a consequence,
some of the price increases could be passed on to products
already on the market.
The business volume with other products was also expanded considerably.
DVD players, which were introduced to the product program for
the first time in 2000, generated sales of EUR 6 million. They more than
compensated the substitution of video recorders by EUR 1.3 million. The
stereo systems product area grew by nearly 80%. In this case, the introduction
of new active speaker systems was especially influential. Sales of
accessories, primarily to supplement televisions, were up 10%.
EBIT RISES AT AN ABOVE-AVERAGE RATE
in EUR million 2000 1999 +/– in%
Consumer electronics 20.2 19.5 + 4
Multimedia
Total consumer electronics
2.1 – 1.0
and multimedia 22.3 18.5 + 21
EBIT
With 19% growth in sales, EBIT increased at an above-average
rate of 21% in both divisions. The growth resulted from a better product
mix by concentrating on high-end products, above all multimedia-capable
televisions. But contrary trends arose from the significantly higher prices for
purchasing components and plastic parts. Nonetheless, they were for the
most part offset by adjusting sales prices and as a consequence of rationalization
effects in production and better utilization of existing capacities.
INVESTMENTS FOCUS ON NEW PRODUCTS AND
EXPANSION OF CAPACITIES
The majority of the investments related to the development of new products
and technologies, the expansion of capacities, and the increase of efficiency
in production.
The investments in software and similar assets predominantly relate
to the expansion of Internet and internal network applications.
The balanced development costs of EUR 4.7 million primarily arose
for projects in the television and multimedia divisions. The emphasis was
on developing 100 Hz technology for televisions and expanding the product
range in the multimedia sector. The projects were largely completed in
the year 2000 with corresponding product solutions.

The largest single investment in property, plant, and equipment
was the completion of the new final assembly line for televisions and multimedia
units. The total amount expended here was EUR 3.4 million, of
which EUR 2.6 million were spent in 2000. As a result of this investment,
the final assembly capacity was increased to 500,000 units per year. The
planned growth in this area is thus covered in terms of capacity for the
next few years. In addition, a substantial improvement in efficiency was
achieved in production.
The capacities in automatic placement were expanded with investments
of EUR 2.7 million. Substantial rationalization effects were achieved
at the same time.
Another focus of the investments, at EUR 5.1 million, was on tools
for designing new products launched in 2000 or to be introduced in 2001.
High-end products need to be presented to end consumers within
an appropriate framework. The platforms created by Loewe for this purpose
range from small presentation stages to presentation systems and
Loewe galleries. The costs are shared with specialist retailers. In the past
year, Loewe invested EUR 1.5 million in such presentation systems.
The additions to financial assets include loans to Loewe galleries to
promote the high-end presentation of Loewe products and a stake in VCB
Virtueller Campus Bayern GmbH, of Hof, Bavaria.
in EUR million 2000 1999 +/– in%
Intangible assets 5.9 5.2 + 13
Property, plant, and equipment 16.9 13.0 + 30
Financial assets 0.2 0
Total investments 23.0 18.2 + 26
Investments
EXPANSION OF MARKETING AND SALES
STRENGTHENING THE LOEWE BRAND
Loewe products have been recognized for their excellence in design for
decades and have received multiple awards, most recently in the form of
design prizes awarded for six products by the Industrial Forum Design Hannover.
A special product design award is conferred every two years by the
German government. The highest German distinction of its kind, it is considered
the Oscar of design and rewards design achievements in the German
industry. This award was recently given for a television for the first
time, for Loewe’s superflat plasma television Spheros. Federal Minister of
Economic Affairs, Dr. Werner Müller, presented the Federal Product Design
Award for 2000/2001 to Loewe and the team Phoenix Product Design.
The entire product was commended: its form, its innovative technology,
its features, and its user interface.
Another achievement in the year 2000 was when Loewe and the
Design Studio Engel received the Good Design Award from the Chicago
Athenaeum for the Loewe Vitros.
33 2000

2000 34 Management Report. Loewe AG
OUTSTANDING PRODUCT INNOVATIONS
The successful multimedia strategy was intensified in 2000 with the wideranging
conversion of high-end products to the modular MediaPlus Chassis.
The change is also reflected in the success of individual products.
Rarely has a product captured a leading position in the market as
quickly as the multiple prizewinner Loewe Aconda. With a market share of
nearly 15%, the Loewe Aconda was able to assert itself in the segment of
televisions with Real Flat picture tubes larger than 72 cm and according to
GfK was a real success story in the German retail trade.
In the third quarter, Loewe presented the first product in the Vitros
product family. The Real Flat picture tube and the attractive, two-color
casing are primarily targeted at younger, technically interested customers.
SOPHISTICATED PRESENTATION OF PRODUCTS
“ambiente@home – inspired by Loewe” is an ambitious and avant-garde
pilot project that was realized in the expanded Loewe Gallery Hamburg at
the end of the year 2000. The living presentation of Loewe televisions,
multimedia systems, and stereo systems takes place in an inspiring setting.
The Loewe Gallery Stuttgart, which boasts 180 square meters of
presentation space, also introduced new trends by taking the art of presentation
a step further with the use of innovative materials. Since September
2000, customers have been offered an entirely new approach to product
placement.
SPONSORSHIP PROMOTES EMOTIONAL AND
INTERNATIONAL IMAGE
The partnership with a leading concert and event agency puts Loewe in the
cultural limelight as an exclusive promoter. Outstanding stage events are
supported and accompanied by Loewe with advertisements in programs,
presence at premiere celebrations, and product placement at top-flight production
and performance venues. In November 2000, the impressive European
tours of the Alvin Ailey Dance Theater and the Harlem Gospel Singers
were on the program.
STRENGTHENING LOEWE’S INTERNATIONAL
SALES STRENGTH
In order to secure the Company’s continued internationalization, the sales
organization was significantly strengthened for the international markets.
In the international business, efficiency was also boosted by systematically
taking advantage of SAP R/3. An Extranet solution as a dealer information
system is gradually being implemented as well.
In the most important European core markets, we have initiated
efforts to make dealer loyalty to the Loewe brand even stronger with a
newly developed partnership concept. The goal is a qualitative improvement
of the sales points. The core of this program is formed by an outstanding
presentation of the Loewe brand on Loewe presentation systems.
In Germany alone, more than 800 dealers were included in the program,
and another 300 will follow in the year 2001. A total of EUR 1.5 million
were invested in presentation systems for Europe in the past year. In addition,
the sales partners invested about the same amount.
Market and technology are changing rapidly. The success of
Loewe’s retailers depends on how well the partners are informed about
changes and innovations. As in previous years, Loewe therefore made it a

point in 2000 to provide information on current trends and developments
in many seminars and workshops focusing on product marketing, trade
marketing, and technology and to discuss these issues with retailers’
employees.
INTENSIFYING COMMUNICATION WITH CUSTOMERS
Loewe’s end consumer magazine Touch has by now taken on a fixed role
as a communications tool. More than one hundred partnership dealers use
Loewe’s magazine, which is published three times a year, to establish and
cultivate personal contact with prospective customers and consumers. The
total circulation, currently 45,000 copies, reflects the fact that the publication
is well received.
Loewe dealers in Germany can use a new Internet marketing
instrument, the Loewe dialog marketing module, to win and keep customers.
This service supports dealers in consciously soliciting selected target
groups with efficient mailings. The innovative marketing instrument will
be successively introduced in the foreign markets as well.
HOW LOEWE IS VIEWED BY ITS TRADE PARTNERS
In the year 2000, Loewe was honored with another especially important
distinction. In a survey by the German industry service “markt intern”,
retailers nominated Loewe as the top television brand in 2000.
In the survey on dealer satisfaction conducted by the Gesellschaft
für Konsumforschung (GfK), discounters rated Loewe as one of the top
three manu-facturers. As in 1999, Loewe was in the first place for retailers.
MAINTAINING THE TECHNOLOGICAL LEAD
Development activities were intensified in 2000 to ensure that the Company
will continue to shine in the future with brilliant test results.
Important focuses in 2000 were the systematic development of
100 Hz technology for televisions, the expansion of the multimedia product
range, and networking many electronic appliances in the household with a
television set transformed into a central communication system. The 1080i,
a new chassis based on HDTV (high definition television) technology, was
developed for the American market. Production started at the end of 2000.
It is designed for high-definition television signals, a technology that will
probably be used in the USA before it is introduced to Europe.
The chassis generation developed for 100 Hz technology for highend
products increases performance significantly, especially in the presentation
of DVB (digital video broadcast) and DVD (digital versatile disc)
sources. The basic chassis, called MediaPlus, is based on the same chassis
platform. At the customer’s request it can be customized with newly developed
online and DVB modules to become a multimedia system.
Our partnership with the Munich-based Institut für Rundfunktechnik
(IRT) centers on open standards for multimedia applications. The Multimedia
Home Platform will make it possible for customers to use a standardized
platform to access network content providers and digital services
offered by various providers independent of the equipment manufacturer.
We expect that this partnership with the IRT and other partners including
Sun Microsystems will sustainably promote the early introduction of multimedia
products.
35 2000

2000 36 Management Report. Loewe AG
Loewe developed “zap2web” with one of Germany’s leading television
networks, ZDF television. “zap2web” establishes a direct connection
between television programs and the Internet: the page corresponding to a
show appears at the push of a button on the remote control, without users
having to type in an Internet address. This is possible because Loewe
multimedia televisions receive and process a special code as part of the
program broadcast by ZDF. This is another important milestone on the road
to a simplified use of multimedia, and it will also be available as a standard
for other programming providers and equipment manufacturers.
A partnership agreement was signed with Sharp concerning a joint
project in the area of LCD televisions. This long-term technology partnership
with Sharp relates to the high-end segment. The alliance benefits from
the combination of Sharp’s display technology and Loewe’s expertise in the
European market in the area of on-screen menus, multistandard tuners,
and the European videotext system. The relevant components are manufactured
at Loewe’s facility in Kronach.
As a result of the cooperation with Sharp, the first 15“ LCD television
using the new TFT LCD (thin flat tube – liquid crystal display) technology
was introduced to the market at the end of 2000. The unit features a
flat display instead of a picture tube using the new LCD technology optimally
adapted to television’s requirements. Loewe has consequently
expanded its flat screen product range with yet another innovative product.
Together with partners, Loewe is working on development projects
such as SIPROS, in which a completely new hardware and software platform
is being developed for multimedia televisions. The projects HARYS
and EMBASSI introduce an entirely new dimension of user-friendly operation.
The project INHOMENET will make it possible to connect televisions to
modern cable networks and mobile networks in a variety of different ways,
both in the home and elsewhere.
In July, a software center for the development of multimedia and
Internet software was established in Hanover and subsequently expanded
into a competence center for digital television and the Internet. The proximity
to the technology departments of the Hanover, Braunschweig and

Hildesheim universities was a decisive factor when choosing the location.
Braunschweig University, for example, is a leading force in the area of digital
television on the basis of the European standard DVB, while the technical
college in Hanover specializes in image compression. This second location
makes it possible to rapidly expand development capacities. However,
we are also continuing to expand the development department at the Kronach
location. In 2000, ten additional development engineers were hired at
Kronach.
OUTSTANDING TEST RESULTS
Throughout the year 2000, Loewe products excelled with outstanding test
results in Germany and other countries. The new multimedia television
Aconda and the plasma television Spheros fared especially well. But other
products scored, too.
For example, the magazine Audio (4/2000) referred to the Aconda
as “a true master of the universe”. Germany’s product testing foundation
Stiftung Warentest rated it among the best (5/2000), and it was ranked as
the test winner by the magazines Hi-Fi Test (2/2000) and Video (3/2000). In
addition, it received the lable “reference class” by the magazine Audio Surround
(4/2000).
The response of testers outside Germany to the Aconda was similarly
positive: “These results are predictably superior, backing up the subjective
impression of a premium manufacturer operating at the top of its
game” (HOME CINEMA CHOICE, 6/2000). In its May 2000 edition, Hifi
vidéo/Home cinéma wrote: “We decided to test the Aconda. As you will
see, these beautiful products can still make you dream, even if they may
appear inaccessible at first.”
In its July 2000 edition, the magazine T3 referred to the superflat
plasma TV Spheros as a “TV from outer space”.
The magazine Video (10/2000) ranked the television Xelos with
“very good” and classified it as a “hot buy”. The user interface concept
was considered especially noteworthy.
In the test conducted by Hi-Fi Test (2/2000), complete system solutions
were tested. Loewe participated with the Aconda 9381 ZW, the video
recorder ViewVision 5106 H, and the DVD player 5006 DD. The verdict was
“top of the line”; the price/performance ratio was graded as
“very good”.
Complete systems were also tested by the magazine Stereo
(10/2000). In this case, the test subjects were the television Credo 7681
ZPH in connection with the stereo system Legro 2, the DVD player Auro
9006 DD, the video recorder Centros 6206 H, the floor speakers L2A, the
surround sound speakers L82 HF, and the subwoofers LS 81 SW. The score
was “very good”, and the system’s wide variety of features was referred to
as “world class”.
In tests of standard 4:3 format and 16:9 wide screen format
televisions conducted by Stiftung Warentest (11/2000), Loewe’s Cantus
3870 ZW television was classified as “top choice” and was given the
highest grade for its excellent features and superior sound.
37 2000

2000 38 Management Report. Loewe AG
STRATEGIC REALIGNMENT OF THE TELECOMMUNICATIONS
DIVISION IMPLEMENTED
The telecommunications division designs and defines technical features for
cordless DECT telephones and answering machines and is responsible for
the sale of these units. Development and production are accomplished by
partners in the Far East.
in EUR million 2000 1999 +/– in%
Sales 23.9 25.2 – 5
EBIT (earnings before interest and taxes) – 0.4 – 0.5 + 20
EBIT as a percentage of sales – 1.7 – 2.0
Operating result – 0.5 – 0.7 + 29
Investments 0.7 0.3 + 133
Net assets 0.8 1.2 – 33
Employees 29 33 – 12
Telecommunications division
SALES STILL DECLINING SLIGHTLY
The strategic realignment of the telecommunications division was initiated
in 1999. In the year 2000, it continued with the concentration on higherend
and high-profit products under the Loewe brand. At the CeBIT IT and
telecommunications fair in February 2000, Loewe introduced the new generation
of cordless 4000 series DECT telephones that later came on the
market in June 2000. In doing so, it made an important step toward the
higher positioning of its telecommunications products. The products given
special recognition by the Industrial Forum Design Hanover included the
cordless phone DECT 5000, which will be launched in the market in 2001.
The product range encompasses cordless telephones based on the
DECT standard, and answering machines.
in EUR million 2000 1999 +/– in%
Cordless telephones 17.3 14.2 + 22
Answering machines 5.3 5.4 – 2
Other 1.3 5.6 – 77
Total sales 23.9 25.2 – 5
Sales
Due to the restructuring and the discontinuation of cord telephones,
sales were down 5% in 2000 in comparison to the previous year.
This is primarily a result of the decision to discontinue cord telephones and
OEM equipment, which entailed a loss in sales of EUR 4.4 million or 77%
over the previous year.
On the other hand, sales of cordless DECT telephones were 22%
or EUR 3.1 million higher than in 1999. Answering machine sales remained
nearly unchanged since the previous year at EUR 5.3 million.

The new products were used to tap the first foreign markets, and
the first sales were made in Belgium and Switzerland.
Sales potentials were not realized in full in the year 2000. While
the shortage of electronic components had an effect in the first half of the
year, there were delays in the production startup of new products as well,
especially in the second six months. On the whole, sales therefore
remained below expectations.
Despite these setbacks, however, Loewe was able to increase its
retail market share in the promising cordless DECT telephones market to
7.1% in terms of value. In the answering machines market, which is experiencing
a slowdown, the market share was expanded to 44%.
EBIT IMPROVED, BUT STILL NOT POSITIVE
in EUR million 2000 1999 +/– in%
EBIT – 0.4 – 0.5 + 20
EBIT
Despite the successful strategic realignment, it was not possible to achieve
positive earnings. At EUR -0.4 million, EBIT was slightly better than in the
previous year. The unsatisfactory result is predominantly a consequence of
the problems with the availability of goods referred to earlier and the
declines in the startup of new products.
INVESTMENTS IN NEW PRODUCTS
in EUR million 2000 1999 +/– in%
Intangible assets 0.2 0.1 + 100
Property, plant and equipment 0.5 0.2 + 150
Total investments 0.7 0.3 + 133
Investments
The investments totaling EUR 0.7 million predominantly relate to tools for
the production of the 4000 series cordless DECT telephones, which has
already commenced, and the production of the 5000 series to be started in
2001.
EXPANSION OF MARKETING AND SALES ORGANIZATION
In the year 2000, the sales organization was strengthened in marketing
and export with four new employees. Through the concentration on Loewe
brand products, the number of employees was reduced in conjunction with
the closure of the subsidiary in Hong Kong. As a result, the number of
employees declined from 33 persons to 29 persons.
39 2000

2000 40 Management Report. Loewe AG
ASSETS AND FINANCIAL POSITION
TOTAL ASSETS GROW AT A SLOWER RATE
THAN THE EXPANSION OF BUSINESS
in EUR million 2000 1999 +/–
Fixed assets 59.0 53.9 + 5.1
Inventories 44.4 32.3 + 12.1
Accounts receivable, trade 84.1 74.6 + 9.5
Other current assets 17.6 16.8 + 0.8
Total assets 205.1 177.6 + 27.5
Shareholders’ equity including
minority interests 70.2 57.8 + 12.4
Reserves 74.6 69.6 + 5.0
Liabilities 60.3 50.2 + 10.1
Total liabilities 205.1 177.6 + 27.5
Total assets increased from EUR 177.6 million in the previous year by EUR
27.5 million to EUR 205.1 million. The 15% growth is lower than the 17%
expansion of business.
FIXED ASSETS RISE AS A RESULT OF HIGHER INVESTMENTS
in EUR million 2000 1999 +/–
Intangible assets 9.0 8.3 + 0.7
Property, plant, and equipment 49.7 45.4 + 4.3
Financial assets 0.3 0.2 + 0.1
Total fixed assets 59.0 53.9 + 5.1
as a percentage of total assets 29 30
Fixed assets
The intangible assets primarily relate to development costs for new television
and multimedia products to be reported under IAS regulations. The
item property, plant, and equipment includes land and buildings in Kronach,
the production facilities located there, and other machinery and
office equipment. It also encompasses tools for design parts that are
almost exclusively with suppliers and presentation systems for Loewe products
used by retailers.
The growth in fixed assets from EUR 5.1 million predominantly
resulted from investments in the amount of EUR 23.7 million and depreciation
totaling EUR 18.5 million.

in EUR million 2000 1999
Invest- Depre- Invest- Deprements
ciation ments ciation
Intangible assets
Software and similar assets 1.4 0.8 0.6 1.0
Development costs 4.7 4.5 4.7 4.5
6.1 5.3 5.3 5.5
Property, plant, and
equipment 17.4 13.2 13.2 10.7
Financial assets 0.2 0 0 0
Total investments 23.7 18.5 18.5 16.2
Investments/Depreciation
The investments of EUR 23.7 million in fiscal year 2000 were EUR
5.2 million higher than in the previous year. The majority was spent on the
development of new products, the expansion of capacities, and the
increase in production efficiency.
The investments in software and similar assets predominantly relate
to the expansion of Internet and internal network applications. The balanced
development costs of EUR 4.7 million for development projects
remained unchanged since the previous year. They primarily had to do with
the television and multimedia divisions.
The largest single investment in property, plant, and equipment
was the completion of the new final assembly line for televisions and multimedia
units. The total volume of investments in this area was EUR 3.4
million, of which EUR 2.6 million were spent in 2000. Automatic placement
capacities were increased with investments in the order of EUR 2.7 million.
Substantial rationalization effects were achieved at the same time. Another
focus of investments, at EUR 5.6 million, was on tools for the design of
new products introduced to the market in 2000 or to be introduced in
2001.
High-end products need to be presented to end consumers within
an appropriate framework. The platforms created by Loewe for this purpose
range from small presentation stages to presentation systems, in
which EUR 1.5 million were invested in 2000.
The additions to financial assets predominantly include loans to
Loewe galleries to promote the high-end presentation of Loewe products.
At EUR 18.5 million, depreciation was below the corresponding
investment volume of EUR 23.7 million.
41 2000

2000 42 Management Report. Loewe AG
HIGHER INVENTORIES DUE TO BOTTLENECKS
IN SUPPLY
in EUR million 2000 1999 +/–
Raw materials and supplies,
unfinished goods 17.6 8.8 + 8.8
Finished goods and products 26.8 23.5 + 3.3
Total inventories 44.4 32.3 + 12.1
as a percentage of total assets 22 18
Inventories
Inventories increased at an above-average rate of 37% to EUR 44.4 million.
The emphasis of the rise was on raw materials and supplies and unfinished
goods, which were twice as high as in 1999. The expansion is a
direct consequence of the supply bottlenecks for picture tubes at year-end.
In order to avoid production losses, backup inventories were deliberately
acquired for certain materials. The idea was to be able to respond to shortterm
bottlenecks with the production of alternative products. A high utilization
of production capacities was ensured in the year 2000 as a result.
Inventories of finished goods were EUR 3.3 higher than in the previous
year and reached EUR 26.8 million. This includes EUR 0.6 million in
inventories held to support a distribution partner. The 14% expansion was
lower than the increase in business volume.
ACCOUNTS RECEIVABLE RISE WITH BUSINESS VOLUME
in EUR million 2000 1999 +/–
Trade accounts receivable 84.1 74.6 + 9.5
as a percentage of total assets 41 42
Trade accounts receivable
Trade accounts receivable were up EUR 9.5 million to EUR 84.1 million.
This means, receivables were 13% higher than in the previous year. Due to
higher sales with quick-paying customers, the rise in trade accounts receivable
was disproportionate to the 17% expansion in business volume.
Of the receivables, EUR 56.4 million were due from German customers
and EUR 27.7 million from foreign customers. The average payment
period of just under two months was slightly shorter than in the previous
year.

OTHER CURRENT ASSETS LARGELY UNCHANGED
Other current assets encompass other assets worth EUR 6.3 million,
deferred tax receivables totaling EUR 1.0 million, and liquid assets of EUR
10.3 million.
No noteworthy changes occurred since the previous year.
FINANCIAL STRENGTH REINFORCED
PROFITABLE BUSINESS IMPROVES EQUITY BASE
in EUR million 2000 1999 +/–
Shareholders’ equity 69.5 57.5 + 12.0
as a percentage of total assets 34 32
Minority interests 0,7 0,3 + 0,4
Shareholders’ equity
Shareholders’ equity increased by EUR 12.0 million to EUR 69.5 million. The
equity ratio of 34% was 2% higher than in the previous year.
At the same time, the ratio of fixed assets to shareholders’ equity
rose from 107% to 118%.
Minority interests (EUR 0.7 million) relate to a 1% minority stake in
Loewe Opta GmbH and a 10% minority stake in Loewe Opta Benelux
N.V./S.A. held since January 1, 2000. It was sold to the managing director
of the company in order to strengthen his identification with and commitment
to the company.
RESERVES TAKE HIGHER BUSINESS VOLUME INTO ACCOUNT
in EUR million 2000 1999 +/–
Pension reserves 27.0 25.8 + 1.2
Tax reserves 4.6 6.0 – 1.4
Other reserves 43.0 37.8 + 5.2
Total reserves 74.6 69.6 + 5.0
as a percentage of total assets 36 39
Reserves
43 2000

2000 44 Management Report. Loewe AG
After part of the pension obligations owed to former employees had been
transferred to a pension fund in 1997, the remaining obligations to inactive
employees were spun off to Loewe Pensionsgesellschaft mbH at yearend
2000. The objective is to separate the operational business from the
administration of pension obligations. EUR 10.6 million were made available
to this company to cover the obligations it assumed. The transfer did
not result in a change in pension obligations because Loewe Pensionsgesellschaft
is included in the consolidated financial statements as an affiliated
company.
Tax reserves were lower due to higher prepayments.
The 14% increase in other reserves was disproportionate to the
rise in business volume. For the most part, this reflects the fact that
reserves for annual bonuses were lower because the growth in sales was
predominantly realized outside Germany.
FINANCIAL LIABILITIES REDUCED
in EUR million 2000 1999 +/–
Long-term debts 5.4 6.8 – 1.4
Trade accounts payable 39.8 24.8 + 15.0
Other short-term liabilities 15.1 18.6 – 3.5
Total liabilities 60.3 50.2 + 10.1
as a percentage of total assets 29 28
Liabilities
Long-term debts were repaid according to schedule. The strong rise in
trade accounts payable was a direct consequence of the expansion of
inventories at year-end. The other short-term liabilities were primarily
reduced through the repayment of loans from Loewe Opta Unterstützungskasse
e.V. and other loans.
STABLE CASH FLOW
in EUR million 2000 1999 +/–
Cash flow from
operating activities 31.1 28.4 + 2.7
investing activities – 23.4 – 18.0 – 5.4
financing activities – 8.4 6.4 – 14.8
Change in cash flow – 0.7 16.8 – 17.5
Cash flow

At EUR 31.1 million, the cash flow from operating activities was only EUR
2.7 million higher than in 1999. The moderate rise was primarily a result of
the tax payments first becoming due in 2000 and relating both to the year
1999 and to 2000. These payments totaled EUR 7.9 million, a EUR 7.5 million
increase over the previous year. As a consequence, they more than
compensated the operating result, which had grown by EUR 6.0 million.
The other changes essentially relate to the EUR 2.3 million expansion
of receivables to EUR 18.5 million and the EUR 1.3 million increase in
committed capital in net current assets.
in EUR million 2000 1999 +/–
Inventories 44.4 32.3 + 12.1
Trade accounts receivable 84.1 74.6 + 9.5
Other assets* 3.7 2.7 + 1.0
Total operating assets 132.2 109.6 + 22.6
Trade accounts payable – 39.8 – 24.8 – 15.0
Other reserves – 43.0 – 37.8 – 5.2
Other short-term liabilities* – 4.6 – 3.5 – 1.1
Total 44.8 43.5 + 1.3
* excluding income taxes
Change in net current assets
The rise in inventories and receivables was almost entirely offset by
higher reserves and liabilities.
The EUR 12.1 million increase in inventories to EUR 44.4 million
served to expand the business volume as well as to overcome bottlenecks
in the supply chain by acquiring backup inventories.
The outflow of funds for investments in intangible assets and
property, plant, and equipment reached EUR 23.5 million, a substantial rise
of EUR 5.1 million since the previous year. The EUR 0.2 million paid out
from financial assets predominantly related to long-term loans to support
sales activities.
The negative cash flow from financing activities in fiscal year 2000
was EUR 8.4 million after the positive cash flow amounting to EUR 6.4 million
in 1999 as a result of the initial public offering. The negative cash flow
reflects the following repayments: EUR 4.5 million for a loan from Loewe
Opta Unterstützungskasse e.V., EUR 2.6 million for a long-term loan from a
supplier, and EUR 1.3 million for long-term loans from banks and other
sources.
The working capital, at EUR 8.4 million, was EUR 0.7 million lower
than in the previous year.
45 2000

2000 46 Management Report. Loewe AG
PERSONNEL REPORT
NUMBER OF EMPLOYEES REMAINS CONSTANT
Loewe employed an average of 1,106 persons in 2000, 19 more than in
1999.
Of this total, 1,077 persons were employed in the consumer electronics
and multimedia divisions, while 29 persons worked in telecommunications.
The Company’s corporate headquarters in Kronach employed
1,060 persons, while 6 persons were employed in the new development
competence center in Hanover. Loewe has 40 employees working in foreign
subsidiaries and foreign locations. At year-end 2000, the Company
had 104 trainees
FEWER EMPLOYEES IN PRODUCTION, MORE IN DEVELOP-
MENT, MARKETING, AND SALES
The 2 % increase in the number of employees over 1999 was clearly below
the 17 % growth in business volume due to the rationalization effects of
the plant and equipment used for the first time in 2000. With a 20 %
expansion of production, only 9 % more employees were required in the
direct production process. On the other hand, there was a disproportionate
increase in the areas of development, marketing, and sales. This development
reflects the expansion of the multimedia product line and exports.
Loewe is growing in the international markets and works in international
partnerships. This is why Loewe attaches tremendous importance
to the ability of new employees to cultivate international contacts.
Loewe took advantage of the new tools of the Internet in recruiting
new employees. The Company also had a presence at university career
fairs in 2000.
Communications engineer at Loewe:
expertise and experience

HIGHER SALES PER EMPLOYEE
Despite strong growth in business volume in 2000, there was no significant
need for more employees. This resulted in a substantial rise of sales per
employee. The rate grew by 15 % to EUR 329 thousand per employee.
FLEXIBILITY HELPS OVERCOME BOTTLENECKS
The adverse effects of bottlenecks in the supply chain were predominantly
felt in the first half of 2000. The working hours program in place at Loewe
made it possible to overcome these difficulties relatively well in production.
A program had been agreed upon with the works council several years ago
to adjust working hours in production according to the seasonal development
of sales. This means that employees work 20 % fewer hours per
month in the low-sales months from April to August, while their working
hours increase correspondingly in the high-volume months from September
to December. This eliminates interest expenses for high inventories in the
summer. At the same time, this arrangement brings about a high degree of
flexibility since inventories can be adapted to the needs of the market.
JOB QUALIFICATION STRUCTURE IMPROVED
The growth in personnel was concentrated on highly-qualified technical
and administrative employees. As a result, the job qualification structure
was further increased in relation to 1999. 15 % of the employees have a
degree from a university or technical college, 57 % have completed occupational
training, 9 % are trainees, and 19 % are semi-skilled.
YOUNG EMPLOYEES AT LOEWE
On average, Loewe employees were younger in 2000. This is accounted for
by the hiring of predominantly younger employees in the past year. The
average age dropped from 38.2 years in 1999 to 37.7 years in 2000.
BASIC AND ADVANCED TRAINING IMPROVE
EMPLOYEE QUALIFICATIONS
OCCUPATIONAL TRAINING AT LOEWE
Loewe depends on highly motivated and capable employees. They form the
basis for the Company’s success. This is why Loewe attaches great importance
to occupational training. More than 9 % of the employees are
Start for a successful future:
vocational training at Loewe
47 2000

2000 48 Management Report. Loewe AG
trainees. Of this total, roughly 60 % are training for technical careers and
40 % for careers in administration. Loewe is well-known in the region for
the quality of its training programs for students. More than 50 % of the
graduates complete their exams with high grades.
GOALS AND PROGRAMS FOR ADVANCED TRAINING
Loewe intends to continue to grow internationally, position the Loewe
brand at a higher level, and dynamically expand the multimedia division.
Loewe’s basic and advanced training programs contribute to the attainment
of these goals. In the year 2000, the emphasis was on the improvement
of foreign language skills, the increased utilization of cutting-edge
information and communication technologies, and the promotion of a corporate
culture based on cooperation. The program addresses both executives
and employees. In addition, executives and employees attended a
large number of seminars covering specialized subjects.
EMPLOYEE MOTIVATION
MOTIVATING EMPLOYEES BY AGREEING ON TARGETS
Performance has to be rewarding. This is why Loewe offers a wide variety
of performance incentives to its employees. Among other programs, there
is a compensation component for executives and skilled employees at all
levels. It is oriented to the attainment of strategic corporate objectives and
operational planning. Agreed-upon targets effectively encourage employees
to be entrepreneurial in their mental processes and activities.
EMPLOYEE SUGGESTION PROGRAM
The employee suggestion program is well received at Loewe. A total of 230
suggestions were submitted in 2000. The benefit realized by implementing
the suggestions, measured by the first year’s savings, increased to EUR 0.2
million. Of this amount, 10 % was returned to the successful participants
in the form of rewards.
RETIREMENT PROGRAM FOR YOUNGER EMPLOYEES
Loewe has developed a retirement program with the support of a highly
competent insurance company. This program contributes to the long-term
loyalty of the employees and is especially designed for younger employees.
The tax-advantaged deferment of salaries results in additional savings for
retirement. Disability benefits are also possible. The accumulated capital is
managed in the insurer’s pension fund. In its first year, the offer received
wide acceptance.

COLLECTIVELY AGREED PART-TIME RETIREMENT
In November 2000, an internal agreement with the works council was put
into effect at Loewe that makes it possible for older employees to elect
early retirement. As a consequence, Loewe is able to hire a higher percentage
of younger employees. So far, six employees have taken advantage of
the offer.
EMPLOYEE STOCK OPTION PROGRAM
The employee stock option program, started at the time of the IPO in 1999,
was continued in 2000. This program is intended to increase employees’
identification with the Company’s objectives. Each employee was able to
acquire a maximum of ten shares at the price of EUR 18 with a tax advantage.
To preserve the tax advantage, the shares may not be sold until 2005.
61% of the eligible employees took advantage of the offer and purchased
a total of 6,620 shares. These shares had been previously purchased on the
market.
THANKS TO OUR EMPLOYEES
The year 2000 demanded a special degree of dedication, ability, and flexibility
from our employees. The Executive Board wishes to thank all of the
employees and the works councils for their exemplary commitment to the
Company.
Successful products are the result of
professional planning and advanced
technology
49 2000

2000 50 Management Report. Loewe AG
RISKS OF FUTURE DEVELOPMENT
ACTIVE RISK MANAGEMENT AT LOEWE
Within the context of value-oriented management at Loewe, a systematic
risk management program supports the identification and optimization of
risk positions and the recognition of opportunities. Accordingly, the Executive
Board of Loewe AG considers an efficient risk management system to
be a central management task and views it as an attractive potential to
realize a further enhancement in the Company’s value. At Loewe, risk management
is therefore an integral part of the organizational structure and
processes at the parent company and the companies in the Group. Its goal
is to recognize risks, avoid unnecessary risks, and keep unavoidable risks
under control.
Loewe regularly reports on existing risks and opportunities, examines
instruments to avoid and curb risks, and ensures that opportunities are
made transparent. It is an ongoing process that takes information from all
the companies in the Group into consideration. Risks and opportunities
with a strategic or operational character are identified, discussed, and evaluated
in connection with periodic analyses. They complement the controlling
system in place at Loewe. As a consequence, an extensive communication
of the risks is made possible on the executive and management level
of all the companies in the Group. At the same time, this approach ensures
that the necessary measures are taken and implemented.
RISK AREAS IDENTIFIED
The risk of a development endangering the continuation of Loewe can be
considered very low. Loewe has a solid equity base and liquidity situation.
Consolidated shareholders’ equity represents 30% of total assets; Loewe
has unused credit lines in the amount of over EUR 25 million.
The expected changes in economic conditions in Europe in 2001
will more than likely not have any negative repercussions for Loewe. Neither
the sales nor supply markets are expected to develop in a manner that
would adversely affect the existence of the Company or could lead to a
substantial deterioration of the Company’s earnings position.
The most important risk areas include the market risk, the technology
and design position, the dependence on important suppliers and
employees in key positions and potential product liability, interest, and currency
risks. No significant changes arose in fiscal year 2000 since the previous
year.
EXPANDING SALES MARKETS, TAPPING NEW MARKETS
The continued development of Loewe depends on the general economic
situation in the most important sales markets. But the strong international
growth of Loewe led to an additional reduction of the dependence on individual
regional markets. Germany is still the largest sales market. The
above-average growth in key-European markets and the entry into one or
two new countries each year will facilitate the regional diversification of
risks in the future as well.
Due to divergent technical standards, the expansion of the market
position outside Germany requires investments that are only amortized
over the long term.

Moreover, the markets for consumer electronics, multimedia, and
telecommunications are characterized by intense competition, in particular
from internationally active companies with a great deal of capital strength
and substantial capacities in the areas of marketing, sales, development,
and production. Loewe is responding to this situation by consciously focusing
on the high-end segment and by being highly flexible.
MASTERING RELEVANT TECHNOLOGIES
The products of Loewe’s three divisions are distinguished by innovative
technology and sophisticated design. In order to continue to maintain the
technological leadership position Loewe commands in all three divisions, it
is of decisive importance to recognize future technological opportunities,
assess the potentials of realizing the individual technologies in consideration
of the strength of the other market participants, define and implement
development focuses, and select partners for implementing them
where appropriate. Loewe concentrates on the development of applications
and conducts fundamental developments in a smaller scope only in
conjunction with subsidized projects. Loewe has many contacts with
experts at universities and other research institutions as well as technologically
leading industrial suppliers. Moreover, Loewe participates in projects
relating to future technologies promoted by government institutions and
cooperates with the most important technology suppliers and manufacturers
of production facilities. Joint ventures entered into in 2000 included
one with Sharp in the area of LCD televisions and one with 3Com in the
area of cable modems.
It cannot be ruled out that in the future individual European markets
will be controlled by providers with a monopoly-like position, in particular
in the pay-TV segment, which would significantly hinder the market
potentials of the technically optimal solution for end consumers. The development
of the market could be similarly influenced by regional cable companies.
In the telecommunications division, Loewe has had most of its
products developed and manufactured by partners in the Far East in the
past. In 2000, delays in the production startup of newly developed products
arose at the subsidiary Loewe Telecom GmbH. For this reason, it is still
the Company’s goal to find a technology partner for multifunctional communications
products in Europe.
DISTINCTION BY DESIGN
For decades, Loewe products have been distinguished by their design.
The risk here is that future trends and preferences of end consumers in
the individual countries might not be recognized in time so that convincing
products can be offered to end consumers. Moreover, there is a risk that
competitors bring design-oriented products to the market to a greater
extent than previously. For many years, Loewe has therefore been supplementing
its design competence by cooperating with outstanding external
designers and pursues a distinct target group appeal. In combination with
innovative technology and reliable quality, this approach is meant to help
the Company continue to assert its leading position in the market.
51 2000

2000 52 Management Report. Loewe AG
AVOIDING BOTTLENECKS IN THE SUPPLY CHAIN
In purchasing certain key components like picture tubes and integrated circuits,
Loewe is dependent on suppliers who in some instances control the
market. Loewe competes with one of these suppliers. In the first half of
2000, there were bottlenecks in the supply of integrated circuits for televisions.
Since the fourth quarter of 2000, there have been delivery delays for
picture tubes that are expected to last until the middle of 2001. As a
result, the planned growth could be adversely affected in 2001 and sales
potentials could remain unutilized.
PROMOTING EMPLOYEES IN KEY POSITIONS
Loewe’s economic success depends on employees in key positions. The loyalty
of these employees has been strengthened with the Loewe AG stock
option plan. Moreover, the Company has intensified its junior management
planning.
MINIMIZING PRODUCT LIABILITY RISKS
Liability risks arising from defective products are to be prevented with a
comprehensive quality assurance system. At the same time, the Company
pays close attention to products in the market in order to recognize defective
products early on and introduce countermeasures. Moreover, Loewe
has adequate insurance coverage; its scope is reviewed on an ongoing
basis and adjusted as necessary.
MANAGING CURRENCY AND INTEREST RISKS
Despite its international focus, the direct currency risk is minimal at Loewe.
The majority of foreign sales is generated in the euro zone. Billing to non-
European countries is almost exclusively in German marks and in the future
will be in euro. On the other hand, currency risks exist where certain products
are purchased for the telecommunications division in US dollars. Such
risks from foreign currency transactions and risks from interest changes are
countered with the use of derivative financial instruments. The management
of currency and interest risks is accomplished centrally at Loewe AG
in accordance with the Executive Board’s specifications regarding areas of
competence and the scope of the hedging instruments employed.
MEMBERSHIP IN HUMANITARIAN FOUNDATION
The subsidiary Loewe Opta GmbH employed slave laborers in World War II.
At the time, the Company was under the trusteeship of a bank of the German
Reich following the dispossession of the Jewish owners and was not
returned to the rightful owners until 1949. Loewe therefore considers
direct damage claims of former slave laborers against the Company to be
unjustified. For reasons of solidarity, in April 2000 Loewe joined a humanitarian
foundation initiated by the German government in an attempt to
reconcile the wrongs of the Nazi regime and at the same time made a substantial
contribution to the foundation’s fund.
At this time, Loewe is not involved in any litigation that could have
a substantial negative effect on the earnings of the Group. Such risks cannot
be entirely ruled out for the future.
TAKING RISK MANAGEMENT ANOTHER STEP FURTHER
The continued improvement of information security and reporting at Loewe
forms an integral part of the development of the risk management system.
The Executive Board of Loewe AG is convinced that due to the strong positioning
in the markets already achieved, the high equity ratio, and the
good liquidity position, the Loewe Group is well equipped for future
requirements.

ENVIRONMENTAL MANAGEMENT
ECO AUDIT AS ENVIRONMENTAL HIGHLIGHT OF THE YEAR
A structured environmental management system was established at Loewe
in 1998. Validation under the EU Ecological Audit Ordinance was then
obtained in June 2000. Loewe participated in the Bavarian Environmental
Pact. The Environmental Pact is an agreement signed by the Bavarian government
and the industry with the objective of establishing cooperative
environmental protection promoting self-responsibility.
ENVIRONMENTAL REPORT 2000
Loewe’s Environmental Report 2000 describes the goals and concrete
measures with which improved environmental protection is to be achieved.
For example, despite an increase in production, it was possible to reduce
the volume of industrial waste by about 16 % by recovering more recyclable
waste.
BAVARIAN ENVIRONMENTAL PACT
In October 2000, Loewe AG joined the new Bavarian Environmental Pact
for sustainable development in the 21st century. By doing so, Loewe committed
among other things to solder an entire component board in mass
production without the use of lead by the year 2003. By 2005, at least half
of all electronic component boards in the televisions produced in Kronach
will be soldered without lead. In addition, Loewe will consciously choose
energy-saving design options in new construction.
COMPANY-WIDE ENVIRONMENTAL PROTECTION
A new environmental program was adopted in 2001. The newly established
measures are meant to further reduce the harmful effects of production
on the environment.
Environmental protection begins with people. This is why
more internal training programs were introduced in 2001 to encourage
employees to adopt environmentally-conscious behavior.
INTERNATIONAL ENVIRONMENTAL STANDARD ISO 14001
In conjunction with the recertification of quality management under the
new, process-oriented ISO 9001 (2000 version), Loewe’s environmental
management system is to be certified under ISO 14001 in May 2001. Even
though the EU eco audit for which validation has already been obtained
has more strict requirements in some areas, as an internationally active
company Loewe also wants to confirm its compliance with the international
environmental management standard ISO 14001 through an external,
independent auditor.
TOP10 CAMPAIGN
In connection with the Top10 campaign supported by Germany’s Ministry
for Research and led by Öko-Institut e.V., high-quality, environmentallyfriendly,
and lean mass products are to be developed, mass-produced, and
innovatively marketed for ten product areas relevant to material flows.
Loewe is currently working on an environmentally-friendly Top10 television.
Its acceptance is being tested in a consumer survey. If the results are favorable,
product development and design are to be initiated. Moreover, Loewe
is continuing to pursue research projects for avoiding and removing more
pollutants in television sets.
53 2000

2000 54 Management Report. Loewe AG
IMPORTANT EVENTS AFTER THE END
OF THE FISCAL YEAR
No events of special significance occurred since the end of the fiscal year.
OUTLOOK
OFF TO A GOOD START IN 2001
Loewe was off to a good start in the new fiscal year. Sales and earnings
are developing favorably. However, since the dynamics of the market on
the whole will not continue in 2001, it is to be expected that the market
growth for televisions and multimedia units will develop at a slightly slower
pace.
READY FOR GROWTH
Loewe will continue to grow in 2001. The consumer electronics and multimedia
divisions will make considerable contributions to this end. The continued
dynamic growth outside Germany will make it possible to significantly
boost volume in sales and production. The sales prices for the highend
products will largely remain constant in 2001. The purchase price level
is expected to decline slightly this year. At the same time, the proportion of
high-end equipment will be increased in order to create above-average
growth in EBIT. New products to be presented at the IFA international consumer
electronics fair in Berlin in August 2001 will support this effort.
POSITIVE CONTRIBUTIONS FROM TELECOMMUNICATIONS
Sales of the telecommunications division are projected to rise in the year
2001, especially since from the present perspective the availability of the
equipment is secured and new export markets are to be penetrated in
Europe. The higher position of the equipment makes a positive EBIT contribution
to be expected in 2001.
PERSONNEL GROWTH LOWER THAN GROWTH IN BUSINESS
In the year 2001, Loewe will continue to create new jobs in Kronach.
About 60% of the planned increase in staffing by about 50 persons relates
to the direct area and results from the higher production volume. Substantial
growth is also planned in the area of development, above all in software
engineering and marketing. As in 2000, personnel expenses are
expected to rise at a lower rate than the growth in business in 2001.
INVESTMENT VOLUME RETURNS TO A NORMAL LEVEL
IN 2001
The significant increase in investments in 2000 was characterized by special
effects such as the installation of a new final assembly line and above-average
investments in tools for new products. Accordingly, a slight reduction
in the investment volume is anticipated for 2001. But once again it will be
higher than depreciation. Due to space constraints at the Kronach location,
structural expansion measures will be necessary for production and administration
facilities. To the extent that it is feasible, the financing is to be
accomplished through a leasing company.

PROFIT TRANSFER AGREEMENT WITH LOEWE OPTA GMBH
Loewe AG intends to conclude a profit transfer agreement with Loewe
Opta GmbH in consideration of changed tax regulations.
HIGHER GROWTH TARGETS
Fiscal year 2000 not only exceeded the Company’s expectations, but those
of analysts as well. Loewe has therefore decided to increase the annual
growth targets presented at the shareholders’ meeting in 2000 for the
medium-term future to a growth in sales of 8 to 10% and a growth in
EBIT of more than 15%. The earnings per share will therefore be upped by
about 20% p.a. Moreover, the return on equity after taxes of 17% in
2000 is to be raised to 22% over the medium term. At the same time, we
are planning to distribute about 50% of the Group’s net profit to the
shareholders as a dividend.
The achievement of the goals set for the year 2001 will to a large
degree depend on the continued development of the market and the competition
in Europe and the availability of components. The first months of
fiscal year 2001 were successful. However, not all sales potentials could be
realized since industry-wide bottlenecks exist in the availability of picture
tubes. The situation is expected to normalize by the third quarter of 2001.
Management is confident that with the committed dedication of our
employees the financial growth targeted for 2001 will be achieved.
Kronach, March 2001
The Executive Board
Dr. R. Hecker Dr. B. Bamberger K. Deisler G. Schaas
25
20
15
10
5
0
>15%
8–10%
Sales
EBIT
Earnings per share
ca. 20 %
Targeted growth rate from
fiscal year 2000
55 2000

2000 56

Television, one dimension further. Loewe.
EXPERIENCE PERFECTION.
Perfection is not status but an engine, constantly pushing us to surpass ourselves.
Thus, images become more graphic, sounds become richer, feelings
become more palpable. He who strives for perfection is always searching.
Always for more perfect solutions. Looking at it this way, we can justly claim:
Actually, we’re never totally satisfied. And that’s good.
57 2000

2000 58 Experience Perfection. Loewe AG
EXPERIENCE PERFECTION.
PERFECTION IS THE KEY TO THE CUSTOMER
LOEWE REPRESENTS THE ULTIMATE IN QUALITY
AND PERFECTION
CUSTOMERS ARE ENTHUSIASTIC ABOUT THE PERFECTION
OF LOEWE PRODUCTS
Loewe’s demand for perfection has made it a premium
brand. A customer who buys a Loewe product knows that it
will not be a disappointment. The idea of perfection is
embedded at all levels at Loewe. It stands for the quality of
the products, the way work is done and the entire corporate
strategy.
For Loewe, perfection is at the center of the value-added chain. Even if it is
true that no one is perfect, the goal of perfection is a spur to maximum
performance. For Loewe, perfection is the utmost guiding principle at all
levels: from the supplier level to production and including human resources
management.
Perfection in the products means having the customer in mind,
offering him or her maximum comfort and the greatest enjoyment. Not the
slightest thing may detract from the customer’s experience of this feeling.
With all the difficulties that the customer may experience during the course
of the day, he or she should know that Loewe products guarantee quality
and perfection.
Loewe makes watching television, listening to music and surfing
the Internet an experience. All the senses are involved; the customer develops
a sense of Loewe quality. The Loewe brand becomes the epitome of
quality for the user.
Every viewer knows the Loewe experience when watching television.
Images of utmost brilliance and sounds of pure clarity meet all expectations.
And the TV set doesn’t even have to be switched on for this experience.
A Loewe television is not hidden away but becomes the focal point
of the home. The design and form match the overall composition of the
furnishings, whether in classical, modern or rustic style.
Take Spheros, for example: the large but extremely flat screen
makes watching TV an experience again – the program may even be irrelevant.
This is no science fiction. The Spheros can be hung up on the wall
like a picture and it at once becomes the center of attention. Digital
instead of analog technology fascinates the eye and ear equally. Cuttingedge
Dolby Digital sound makes the stereo experience perfect. LCD screen

technology in the Loewe FL 38 is proof positive of technical perfection.
Quality for the eye in every Loewe television means impressive technology
and top-notch design. It is the same with the color scheme: sets with a
stratosmetallic finish fit perfectly into the ambience of any home. The manufacturing
is also perfect. The finish on the enclosure is the result of a multicoat
process requiring a high level of skill and precision.
First-class quality in DVD players is typical for Loewe. The Auro, for
instance, is setting new standards. With Auro, movie buffs can bring the
perfect enjoyment of cinema into the home. The challenge for the Loewe
engineers was to achieve a maximum in performance and ease of use with
as few separate components as possible. The result can be seen and heard.
Xemix is a classic example of perfect technology and Loewe’s systems
thinking: the television and active speakers are perfectly matched. Of
course, all components can be operated with only one remote control.
If you want to feel, you also must hear. So, the story of perfection
is being continued with Loewe audio systems. Legro is opening up new
horizons. Sound-optimized speakers provide a pure listening experience. All
Legro models are distinguished by perfect components, flawless technology,
high user-friendliness and a clear design. The active speakers also meet
special customer desires. For example, the L 82 HF eliminates the need for
obtrusive speaker cables. Innovative materials were used in the passive
The winner of the German Award for Product
Design triumphs with its outstanding design
and perfection: Loewe Spheros
59 2000

2000 60 Experience Perfection. Loewe AG
The Loewe Aconda:
Passing the test many
times over, with 15%
market share
two-way, high-end LS 67 and LS 86/85 speakers. Varicor has extremely
good acoustic properties. It is four times as dense as wood and reduces
sound coloration to an absolute minimum. In one word: perfection. Nor is
perfection neglected in the manufacturing. Every speaker is individually
hand-finished.
Function and quality are also paramount in the telecommunications
division. Every Loewe telephone has its particular strengths, but one
thing is true of all of them: customer demands are the only standard –
from the cordless handset to the compact second phone and the digital
answering machine.
That all Loewe products fit together perfectly is the result of systems
thinking. Televisions, speakers, video recorders, or DVD players – all
components are designed to function together or as single units. Loewe
racks are a striking example. When the door of the CD rack for the Legro 2
and Legro 4 hi-fi systems is opened, the quality is immediately obvious. As
many as 68 CDs can be seen in a clear arrangement. So, more devices do
not necessarily make things more difficult for the customer. Rather, the
customer immediately and intuitively feels at home with every expansion or
upgrade. That’s the way it is in the world of Loewe.
The will to perfection also means not standing still. Loewe considers
itself to be a driving force in the market for innovation. In the Internet
arena, Loewe is competing with the PC, which can also be used to watch
television, with a television that can also be used for the Internet. The
MediaPlus concept makes it possible to watch television, surf the Internet
and send e-mail to friends as easy as can be. Suddenly, the Internet is
totally simple. Freedom starts in the living room.
Quality and perfection do not stop when a Loewe product leaves
the shop floor. Actually, that is when the real challenge begins: proving
itself to the customer. Quality is another word for customer enthusiasm.
And since customer management lives from interaction, the Loewe Hotline
is always ready to talk with and serve the customer.
No one likes to think that a Loewe product will have to be disposed
of at some time in the future. But when that time arrives, there
should be no special difficulties. In its Environmental Declaration 2000,
Loewe dedicated itself to protection of the environment. This includes low
power consumption by the products, long service life, and recyclability or
disposability.
A zero defects policy exists in production as well. No Loewe product
leaves the factory without thorough testing. The results are documented
with the aid of test standards, relating for instance to power, voltage
and temperature measurements on various components. Critical components
are subjected to special testing. Climatic tests, marginal tests, mainsborne
interference simulation and load tests ensure that the Loewe engi-

neers solve problems, and not the customers. With all Loewe products, the
utmost value is placed on quality assurance measures. Safety, reliability,
functionality, performance range, and performance are the criteria.
The quality of Loewe products starts with the supplier. No part
may be defective. Consequently, Loewe strives to have a fair and cooperative
relationship with its suppliers. This results in an alliance to serve customers.
Trained dealers provide advice and support before and after the
sale.
Of course, the strict standards that Loewe places on its suppliers
and outside service providers also apply to Loewe itself. A quality audit
applied both in-house and externally shows if all current activities and
results meet the goal of perfection. Whenever variances and defects are
detected, optimization measures are initiated promptly. For instance, a list
of approved suppliers is subject to permanent review and updating based
on the results of the external audit.
Quality and perfection is the guiding principle for Loewe’s 1,106
employees. Consequently, nothing is left undone to maintain and improve
this high standard. The ability to compete in international markets is supported
by foreign language courses. A compensation component is a special
motivation for skilled employees and executives not to let up in their
strivings for perfection. A great amount of importance is placed on training
and continuing education because these measures raise quality awareness
and improve the quality orientation. Since such a high standard cannot be
assured in low-wage countries and it is just those highly-qualified employees
who safeguard the competitive advantage, Loewe cannot consider producing
in such countries. Loewe is focused on perfection through and
through. Loewe shares in the responsibility for the work of everyone in
the Group, irrespective of work role and hierarchy.
Loewe’s corporate strategy is as straightforward as it is effective.
Quality management in all areas permanently ensures a better product.
Loewe puts its trust in continuity and not on quick solutions because the
idea of quality has become the essential characteristic of the Loewe brand.
Loewe is not oriented to anonymous mass markets but rather to the
sophisticated high-end segment. Profitable margins are possible in this
market where perfection above all is the key to people’s hearts and minds.
Loewe must be experienced.
Television with a format: The Real Flat picture
tube and widescreen format give the Vitros
visual dimension
61 2000

2000 62

Beauty that opens your eyes. Loewe.
EXPERIENCE DESIGN.
Design is a sheer feeling of well-being for the eyes. It travels over clean lines,
pure forms, and beautiful materials in order to discover perfection. Design
makes a television set a fascinating work of art. Like the Loewe Spheros,
awarded the German Prize for Product Design in 2000, the first time in history
it was awarded to a television set. This makes us proud. As do the many,
many other prizes for outstanding design.
63 2000

2000 64 Experience Design. Loewe AG
EXPERIENCE DESIGN.
LOEWE DESIGN IS TIMELESS
THE LOEWE BRAND IS TRANSPORTED BY EMOTIONS
TECHNOLOGY AND FORM CREATE A UNITY
Perfect Loewe products demand perfect and sophisticated
design. Maintaining good form is the guiding principle for
Loewe when it comes to outward appearances. Far from
short-lived trends, there is only a place for the timeless. And
Loewe has occupied this place.
Loewe products create enthusiasm. And that is not due just to the technical
perfection. Content and form create a unity at Loewe. The exterior
design reflects the internal values.
In design, Loewe does not bet on short-lived trends. Quick effects
with discordant ideas represent other products. Loewe always works with
clear, unambiguous forms. The user will be able to take pleasure in them
today, tomorrow, and even the day after tomorrow.
For Loewe, it is essential to orient its design and its products to the
buying behavior of its customers. It has become a principle for Loewe not
to react passively to trends but rather to actively attract the interest of the
customers it addresses.
Consequently, a marketing and design strategy was developed
which is oriented to various customer groups with product and system
solutions tailored to them. This requires systems thinking, with a triad of
technical quality, mechanical perfection, and high aesthetics on the inside
and a seamless appearance on the outside, matching the quality of the
product. The product and brand thus complement each other. At Loewe,
word and deed form an inseparable unity.
Loewe products can legitimately claim to be something special and
yet they must simultaneously address a large group of buyers. The Loewe
marketing and design strategy achieves this by awakening demand. The
customer must be convinced that a Loewe product is basically the best

thing for him or her personally. The product must awaken enthusiasm at
the time of the sale, be convincing in use and generate long-term sympathy.
The emotional loyalty to the brand plays a significant role – particularly
in times of greater comparability of products. Often, it even works
contrary to all rational evaluations and is the deciding factor for the purchase.
The effect produced by the design strengthens the customer’s emotional
loyalty to the product.
Emotionality, transported via technology and design, has a key
function particularly in the TV sector where a change of generations is
presently taking place. The catchword is “flatness”. On the one side, sets
based on conventional tube technology attempt to create the illusion of
flatness with devices such as Real Flat screen, shortened picture tubes and
Winners of the Year 2000: The hi-fi
system Legro 3 and Spheros, for their
extraordinary quality and aesthetic
appearance
65 2000

2000 66 Experience Design. Loewe AG
Aconda 9381 ZW with ViewVision:
Design follows functionality
by design implementation. On the other side, there are already products
with LCD displays and plasma technology that are really flat. Just as important
as flatness in televisions is the trend to miniaturization and low weight
in hi-fi products.
For Loewe, emotionality means speaking to all the senses. Multisensuality
is the magic word that opens people’s hearts. Many buyers
assume that the quality is excellent. Now it is a matter of creating sensual
experiences.
Loewe’s success and special position on the market are essentially
based on Loewe’s own design standard. It is distinguished by the fact that
it is functional and emotional at the same time, that it reduces everything
to the essential, that all details are taken into account, and that it makes
independent solutions possible.
Loewe products do not hide their technological character by pretending
to a be a piece of furniture. Rather, they want to be experienced
as convincing samples of contemporary global and European design with
strong roots in the German design tradition. Our design philosophy is consistently
applied in all product families – even in the smallest accessories.
Clarity in design demands clarity in the design parameters. Consequently,
they were determined based on attributes including innovative,
high-initiative, trend-setting, timeless, self-explanatory, logical, and emotional.

The character of a product is defined by its design. For that reason,
the design parameters are used here also. The focus is always on establishing
a bond of trust with the customer who must be convinced of the reliability
and quality of Loewe products. On the design side, this results from
balanced proportions, an easy visual charm, a symmetrical design, visual
quality, and functionality.
Truth is in the details. Consequently, expanded parameters of the
design standard are applied in every detail. Take, for example, the systematic
color arrangement, easy accessibility of all controls, minimized operator
functions, integral cable routing, and space for accommodating video or
DVD units in the rack.
The Loewe design standard:
Functional, emotional, and reduced
to the essential
67 2000

2000 68

The most beautiful way to surf. Loewe.
EXPERIENCE INNOVATION.
Images learned how to move decades ago. Today they can speak,
act and listen on command. And development continues. Loewe
is right in the middle of the action. The area of multimedia is our
playing field, Internet applications and digitalization our daily challenge,
and internal integration is one of themes of the moment.
We have visions to realize them. So seeing can achieve new dimensions.
69 2000

2000 70 Experience Innovation. Loewe AG
EXPERIENCE INNOVATION.
LOEWE AND ZDF PRESENT ZAP2WEB
LOEWE DEVELOPS THE MEDIAPLUS CHASSIS FOR
INTERNET ACCESS VIA THE TELEVISION
CENTER OF COMPETENCE IN HANOVER LINKS PRODUCT
DEVELOPMENT AND SOFTWARE KNOW-HOW
The future of television, today. Television, the Internet, and
multimedia are becoming ever more closely linked. This is
resulting in the development of a completely new world of
entertainment, information, and communication, with an
incredibly broad spectrum of capabilities. Intelligent technology
from Loewe is opening up this new and fascinating
world, and at the same time is turning visions into reality.
The world has become a village. The Internet and the new media provide
the means for global communication and extensive exchange of information.
In these surroundings, Loewe considers itself to be in a better position
than ever for achieving its goal of becoming the leading multimedia TV
enterprise internationally.
In this light, Loewe, in cooperation with ZDF, has developed a website
(zap2web) that enables direct access from the TV to the Internet on all
Loewe multimedia televisions. Such a link makes it possible to view the
corresponding Internet page for a TV program that is currently running.
This cooperation with ZDF, and the international orientation of the entire
Group, is also being demonstrated at this year’s IFA-fair. The new Loewe
multimedia products are going to be displayed to the public at a joint
Loewe-ZDF booth. The third generation of multimedia televisions will take
center-stage at the show. In this manner, Loewe is relentlessly pursuing its
course towards becoming the internationally recognized system provider
for home multimedia.
PRODUCT DEVELOPMENT IN MULTIMEDIA, AND OTHER
SYSTEM INTEGRATION
In 2000, the MediaPlus Chassis, a modular multimedia platform developed
by Loewe, will be installed in the high-end product lines including the new
television families Aconda and Vitros, and then also in the existing product
lines, Credo, Arcada, Planus, and Ergo. Completion of development of the
DVB module for reception of digital television signals via satellite and Media-
Plus device electronics was achieved in the spring of 2000. The software
for the online module TVO-2 for display of Internet pages on the TV screen
was updated to match the new requirements of the Internet. This involved
incorporating the SSL-3 encryption algorithm which enables secure transmission
of content in services such as home banking. In addition, an integrated
solution for surround speakers and headphones was created to opti-

The television set as the
central element in the
perfect interplay of style
and modern technology.
With the Plasma TV, Loewe
creates the future of the
living room.
mize the connection of wireless speakers. The television as the central element:
a perfect harmony of style and the most modern technology. With
the plasma television Spheros, Loewe is setting the scene for the future of
living.
RESEARCH PROJECTS
Loewe Opta GmbH, the operating subsidiary of Loewe AG, is a partner in
many research projects that were subjected to tenders on a regional,
domestic, and also European basis. In principle, the purpose of all research
projects is to gather know-how for future development tasks. In the year
2000, three significant research projects were commenced.
Project SIPROS (started in 1999) is developing new hardware and
software architectures for multimedia devices. In addition, the groundwork
for a high-performance, low-cost rear-projection process for large screen
television sets is being performed.
Project EMBASSI (started in 1999), launched in association with
more than 20 research and industry partners, is researching new possibilities
in multi-modal design of user interfaces, and realizing them in prototype
form.
Project INHOMENET is financed with funds from the Commission
of the EU. The purpose of this project is to investigate the possibilities for
in-home networking, and several international partners are involved in the
project. The basis for this project is the new standard for networking consumer
electronics devices, the IEEE 1394 bus.
Loewe is a pioneer in the market, with integrated multimedia
products for the home. MediaPlus, the new device electronics developed by
Loewe, is the basis for the complete line of high-end products.
The modular MediaPlus chassis makes it possible to equip television
sets with the online module for simple Internet access, or with the
71 2000

2000 72 Experience Innovation. Loewe AG
Onto the Internet with Loewe:
The Control@Media infrared keyboard makes it
possible to send e-mail via the television set
DVB module for receiving freely broadcast digital TV programming, right in
the factory. Simply integrate it at the factory, or have a qualified dealer
install it afterwards. To the Internet with Loewe: the infrared keyboard
Control@Media makes it possible to write e-mail using the television set.
TELEVISION AND THE INTERNET
With Full PiP, the picture-in-picture function in a Loewe MediaPlus television
set, it is easy to surf the Internet while at the same time still watching
the desired television program. The remote-control device developed by
Loewe, Loewe Control, makes it easy even for Internet novices to quickly
learn how to navigate the Internet and display webpages. Because the
Loewe Control is a remote-control device and a mouse control wrapped
into one. The infrared keyboard Control@Media makes it possible to write
and edit e-mail, memos, letters, etc., all while sitting in the armchair in
front of the television. The Loewe Channel, which has been honored with
a multitude of awards, simplifies access to the Internet. The channel contains
a listing of the most interesting German-language Internet addresses.
The content is divided into fourteen categories, from which favorites can
be selected. It is not necessary to enter Internet addresses using the keyboard,
because the remote control can address the appropriate icons on
the screen and run the associated commands. Different Loewe televisions
contain a factory-installed VGA upgrade kit, the online module, and a
broadband picture tube plate, e.g. Xelos@Media. In addition to the ISDN
interface, these televisions contain two further interfaces: a serial interface
for connection too an analog modem, and a TCK interface. This interface
and a so-called TCMCIA card enable connection to a local area network, a
cable modem, or an XDSL modem for high-speed Internet. In addition, a
chip-card reader has been installed, which renders the device ready for
future chip-card transactions.

DIGITAL TELEVISION
Digital television encompasses the variety that is over 130 non-scrambled
TV channels already available today. Picture and sound are displayed and
transmitted as digital data. Because of this, Loewe multimedia televisions
can also render all digital radio programming in sound quality almost
equivalent to that of a CD. Apart from a multitude of TV programs, digital
television also contains many different programming guides, so-called EPGs
(Electronic Program Guides). These provide the viewer with a wealth of
additional information about the program currently being viewed, and also
about future broadcasts and days.
Loewe system solutions provide
new dimensions in seeing and
hearing. Audio, video and hi-fi, all
linked by infrared remote control
Certain providers of programming also broadcast Dolby Digital
multi-channel sound along with the digital programming, so that the TV
viewer can experience feature films in an atmosphere comparable to a
movie theater. In this area, Loewe offers a number of so-called “Home Cinema”
solutions alongside the high-quality (40-watt) speakers already provided
in its televisions; these solutions deliver the movie-theater experience
through best picture, best sound, and appropriately selected design. Be it a
Loewe television, DVD player, or the matching audio system, all of them
are easily operated with Loewe’s infrared remote control and can communicate
with one another.
CENTER OF COMPETENCE IN HANOVER
Loewe has recognized for a long time that one of the tendencies in the
consumer electronics sector is the dependency of product development on
software know-how. This was the reason for establishing the Center for
Software Know-how in Hanover. This center of competence is a part of the
“New Technologies” department. Hanover is located within the catchment
area of the relevant technical faculties at the universities of Hanover,
Braunschweig, and Hildesheim.
For example, the University of Braunschweig is a leader in digitaltelevision
research based on the European DVB standard, while the university
in Hanover occupies a similar leadership position in picture compression.
Altogether, the New Technologies department had 30 employees as
of the end of the year. These principally included software developers and
engineers.
73 2000

2000 74
Internationally successful on-air. Loewe.
INTERNATIONAL MARKETS.
All over the world there are eyes to see. All over the world people
speak a single language: the language of images. Loewe has mastered
this language perfectly. Moreover, we’re on a successful
course of international expansion. We’re conquering new markets
and entering into strategically important joint ventures, allowing us
to grow far and wide. Eyes recognize aesthetics and quality at
every place in the world. At every moment.

75 2000

2000 76 International Markets. Loewe AG
INTERNATIONAL MARKETS.
LOEWE IS PRESENT IN 30 COUNTRIES AROUND THE
WORLD
EXPORTS ARE 42 % OF SALES
LOEWE STAYS ON THE INTERNATIONAL OFFENSIVE WITH
MULTIMEDIA TV SETS
The Internet knows no borders. Nor does Loewe. An internationally
operating enterprise such as Loewe is at home in
many markets and thus draws on the innovative force that is
only available globally.
An international approach is important to Loewe. It is no wonder that the
Loewe brand is present in over 30 countries of the world. And more are
still being added. The contracts establishing a cooperative relationship with
one of the most significant companies in India have been signed. The market
entry will take place in early 2001. Early in the year, the first flagship
store was opened in Singapore. Additional expansion in the Asian region is
planned.
Loewe has been present in Australia for years. A 45 % growth rate
last year speaks for the good reputation of Loewe products. The Summer
Olympic Games were the cause for the positive sales figures. Sports fans
simply demand high performance.
The international markets offer sufficient potential to tap further
revenue sources and to optimize the product mix towards more sophisticated
products. In its business with foreign partners, Loewe seeks to offer perfect
high-end solutions.

Success in 2000: focus on international markets
Expansion is also the name of the game in the European core markets.
A systematic expansion of distribution resulted in a 30 % growth rate
for Loewe in Europe. In the most important core countries of Europe,
Loewe is one of the five largest suppliers in the television segment of the
market. It is in seventh place in Italy and in eighth place in France. To build
on these positions, Loewe has continuously supported export marketing
and placed it on a sound footing.
One way to gain market shares in these core countries was to
establish first-rate specialty shops accompanied by a quality offensive. The
customer should not only become aware of the perfection of Loewe products
at home. This perfection applies to technology and design. More than
100 design awards won by Loewe in recent years prove that not only customers
feel this way. Many of these awards have been in the international
arena.
Xelox@Media drew
international attention
77 2000

2000 78 International Markets. Loewe AG
Development partnerships strengthen
international cooperation
Australia
Benelux countries
Denmark
Estonia
France
Greece
United Kingdom
Russia/CIS
Hong Kong
India
Israel
Italy
Kuwait
Latvia
Lebanon
Lithuania
Malta
Morocco
150
125
100
75
50
25
0
98,0
138,2
International sales
North-Cyprus
Norway
Austria
Poland
Portugal
Saudi Arabia
Sweden
Switzerland
Singapore
Slovenia
Spain
South Africa
Czech Republic
Turkey
Hungary
United Arab Emirates
USA
Cyprus
111,0
7,0
10,1
99 00 99 00 99 00
Sales in European core markets
Sales in Australia
Total sales abroad
151,8

Global presence of Loewe
Loewe has reorganized its marketing activities in the Eastern European
growth markets Poland, Hungary, and the Czech Republic, setting the
stage for participation in the disproportionately high growth in these countries.
That this commitment is rewarded has now been proven in Russia:
sales there have more than doubled. A further doubling is anticipated for
this year.
Innovations are only possible through international cooperation.
For that reason, Loewe is entering into development partnerships with
European companies, universities, and institutions to create future technology
platforms. Current projects are focused on the development of the
semiconductor architecture for multimedia terminals, home networking,
agent-supported operating systems for the user-friendly operation of complex
electronic devices, or the electronic signature for home multimedia.
A company that participates in the international market must rely
on its employees. For that reason, the guiding principle in Kronach is: every
employee is at home in the entire world, whether via the Internet, by
learning another foreign language, or by traveling. Business success –
including international success – starts in the minds of the employees.
79 2000

2000 80
A film-worthy performance. Loewe.
Numbers are the purest kind of information. At the end of a year, we inform
you of the success of a company – of our success. Because we’re also perfectionists,
we prefer to speak of solid results. But behind these results stand
optically and technically sophisticated products. Products that do not recognize
the start or end of a year, because they are designed for more. For eyes
and ears that want to enjoy with all the senses.

81 2000

2000 82 Annual Financial Statements. Loewe AG
CONTENTS
CONSOLIDATED INCOME STATEMENT 83
CONSOLIDATED BALANCE SHEET 84
CONSOLIDATED CASH FLOW STATEMENT 85
CONSOLIDATED FINANCIAL STATEMENTS OF LOEWE AG
BASIS OF PRESENTATION 86
ACCOUNTING AND VALUATION PRINCIPLES 88
NOTES TO THE INCOME STATEMENT 90
NOTES TO THE BALANCE SHEET 94
OTHER INFORMATION 103
CASH FLOW STATEMENT 104
SEGMENTAL REPORTING 104
MANAGEMENT BODIES OF THE PARENT COMPANY
LOEWE AG 106
MANAGEMENT BODIES AND OFFICES HELD 108
INDEPENDENT AUDITORS’ REPORT 110

CONSOLIDATED INCOME STATEMENT FOR THE YEAR
ENDED DECEMBER 31, 2000
EUR thousands Notes 2000 1999
Sales
Manufacturing cost of goods and services
1 363,589 100.0 % 309,525 100.0 %
produced in order to generate sales 2 – 269,332 – 74.1 % – 231,500 – 74.8 %
Gross margin 94,257 25.9 % 78,025 25.2 %
Selling expenses 3 – 63,525 – 17.5 % – 52,322 – 16.9 %
Administrative expenses 4 – 10,663 – 2.9 % – 9,530 – 3.1 %
Other operating income 5 9,899 2.7 % 7,793 2.5 %
Other operating expenses 6 – 8,344 – 2.3 % – 6,403 – 2.0 %
Income from participating interests 258 0.1 % 389 0.1 %
EBIT 21,882 6.0 % 17,952 5.8 %
Interest and similar income 931 0.3 % 383 0.1 %
Interest and similar expenses 7 – 2,015 – 0.6 % – 3,500 – 1.1 %
Profit from ordinary activities 20,798 5.7 % 14,835 4.8 %
Extraordinary expenses 0 0.0 % – 4,776 – 1.6 %
Earnings before taxes (EBT) 20,798 5.7 % 10,059 3.2 %
Income taxes 8 – 8,481 – 2.3 % – 4,709 – 1.5 %
Net income before minority interests 12,317 3.4 % 5,350 1.7 %
Minority interests – 279 – 0.1 % – 46 0.0 %
Net income after minority interests 12,038 3.3 % 5,304 1.7 %
Profit carried forward 6,789 1,485
Allocation to other retained earnings – 2,500 0
DISTRIBUTABLE PROFIT 16,327 6,789
83 2000

2000 84 Annual Financial Statements. Loewe AG
CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2000
EUR thousands Notes 2000 1999
ASSETS
Fixed assets 9
Intangible assets 9,008 8,302
Property, plant, and equipment 49,666 45,473
Investments 338 178
Total fixed assets 59,012 53,953
Current assets
Inventories 10 44,438 32,316
Trade accounts receivable 11 84,102 74,557
Other short-term receivables 12 6,324 5,939
Deferred tax assets 13 979 1,785
Cash and cash equivalents 10,277 9,089
Total current assets 146,120 123,686
TOTAL ASSETS 205,132 177,639
LIABILITIES AND SHAREHOLDERS’ EQUITY
Shareholders’ equity 14
Subscribed capital 7,075 7,075
Capital reserve 43,631 43,631
Retained earnings 2,500 0
Distributable profit 16,327 6,789
Total shareholders’ equity 69,533 57,495
Minority interests 15 642 295
Provisions
Provisions for pensions and similar obligations 16 27,031 25,819
Tax provisions 17 4,565 6,013
Other provisions 18 43,019 37,789
Total provisions 74,615 69,621
Liabilities 19
Long-term debt 5,417 6,768
Trade accounts payable 39,787 24,831
Other short-term liabilities 15,138 18,629
Total liabilities 60,342 50,228
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 205,132 177,639

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR
ENDED DECEMBER 31, 2000
EUR thousands 2000 1999
Operating activities
Profit from ordinary activities
plus/minus
20,798 14,834
Depreciation and amortization of fixed assets 18,505 16,243
Book profits on disposals of fixed assets – 213 – 63
Increase in pension provisions 1,212 339
Extraordinary expenses 0 – 430
Income taxes paid – 7,907 – 358
Net cash before changes in net current assets 32,395 30,565
Increase/decrease in inventories
Increase in trade accounts receivable
– 12,122 3,239
and other assets – 10,465 – 11,400
Increase in other provisions
Increase in trade accounts payable
5,230 3,410
and other liabilities 16,065 2,550
Net cash provided by operating activities 31,103 28,364
Investing activities
Payments for purchases of intangible assets
and property, plant, and equipment – 23,491 – 18,441
Payments for purchases of investments
Proceeds from disposals of property, plant,
– 216 – 13
and equipment 168 401
Proceeds from disposals of investments 192 102
Net cash used by investing activities – 23,347 – 17,951
Financing activities
Increase/decrease in minority interests 67 – 1,110
Capital increases 0 36,901
Expenses for the IPO 0 – 4,346
Repayment of loans – 8,491 – 24,754
Transfers to Loewe Opta Unterstützungskasse e.V. 0 – 332
Net cash used/provided by financing activities – 8,424 6,359
Cash-effective change in liquidity – 668 16,772
Composition of cash and cash equivalents:
EUR thousands 31.12.2000 31.12.1999 Change
Liquid funds 10,277 9,089 1,188
Short-term bank loans – 1,858 – 2 – 1,856
Cash and cash equivalents 8,419 9,087 – 668
85 2000

2000 86 Annual Financial Statements. Loewe AG
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF LOEWE AG
BASIS OF PRESENTATION
The consolidated financial statements of Loewe AG and its subsidiaries
have been prepared in accordance with the International Accounting Standards
(IAS). These accounting principles remain unchanged on last year.
No consolidated financial statements were prepared in accordance
with the German Commercial Code (HGB). As the requirements of § 292a
HGB have been met, the consolidated financial statements according to IAS
exempt the Company from the obligation to submit such statements
according to the German Commercial Code. The euro was adopted as the
Company’s functional currency in 2000. The figures for 1999 in German
marks (DM) have been restated accordingly in euro (EUR).
PRINCIPLES OF CONSOLIDATION
As in 2000, the assets and liabilities reported in the consolidated financial
statements have been accounted for and valued in accordance with uniform
methods. All intra-Group accounts receivable, liabilities, sales, payments,
income, expenses, and profits have been eliminated.
The Group’s capital has been consolidated under the revaluation
method by offsetting acquisition costs against the parent company’s shareholders’
equity at the time of acquisition.
These consolidated financial statements apply the following
accounting and valuation methods that differ from German commercial
and joint-stock company law and are mandatory under IAS:
1. Internally produced intangible fixed assets (development costs) are
accounted for in accordance with IAS 38.
2. Deferred taxes are established in accordance with the balance-sheet-oriented
liability method under IAS 12.
3. Under finance leases, assets are capitalized and residual obligations
reported as a liability in accordance with IAS 17.
4. Pension provisions are accounted for under the projected unit credit
method in accordance with IAS 19.
5. Provisions for anniversary bonuses and death benefits are accounted for
under the projected unit credit method in accordance with the accounting
rules promulgated by the Financial Accounting Standards Boards (FAS ‘87,
Financial Accounting Standards Nr. 87).
6. The provision for deferred maintenance is excluded in accordance with
IAS 37.

GROUP OF CONSOLIDATED COMPANIES
The following companies were consolidated at the balance sheet date of
December 31, 2000:
Subscribed Interest
capital
Parent company
Loewe AG, Kronach EUR 7,075,000.00
Subsidiaries
Subgroup Loewe Opta GmbH,
Kronach
Loewe Opta GmbH, Kronach DM 45,000,000.00
(EUR 23,008,134.65)
99 %
Subsidiaries of
Loewe Opta GmbH:
a) BAK Vermögensverwaltungs DM 50,000.00 100 %
GmbH, Hanover (EUR 25,564.59)
b) Loewe Opta Benelux N.V./S.A., BEF 2,500,000.00 90 %
Antwerp, Belgium
Subsidiary of
Loewe Opta Benelux N.V./S.A.:
(EUR 61,973.50)
Loewe Opta Nederland B.V., HFL 200,000.00 100 %
Nieuwegein, Netherlands (EUR 90,756.04)
c) Loewe Pensionsgesellschaft
mbH, Kronach
EUR 30,000.00 100 %
In 2000, 10 % of the subscribed capital of Loewe Opta Benelux N.V./S.A.
was sold to a Member of this Company’s Executive Board in order to
strengthen its ties with Loewe.
Loewe Pensionsgesellschaft mbH, which was acquired in 2000,
manages the assets and pension entitlements of former employees of
Loewe Opta GmbH.
Subgroup Loewe Telecom GmbH,
Kronach DM 3,000,000.00 100 %
(EUR 1,533,875.64)
Loewe Telecom (HK) Ltd., Hong Kong, which was excluded from consolidation
as at December 31, 1999, was liquidated in 2000 and has in the
meantime been deleted from the Commercial Register.
Loewe Binatone France S.A.R.L., in liquidation, was excluded from
consolidation as at December 31, 2000. The winding-up of the company
generated income of EUR 31,000, which is reported under other operating
income. The company was dissolved in 2000 and deleted from the Commercial
Register at the beginning of 2001.
CURRENCY TRANSLATION
All consolidated companies belong to the euro zone. Foreign-currency
items in the balance sheet and in the income statement were translated at
the exchange rates fixed since January 1, 1999.
Belgium (100 BEF) 2.47894
France (100 FRF) 15.2449
Netherlands (100 NLG) 45.3780
87 2000

2000 88 Annual Financial Statements. Loewe AG
ACCOUNTING AND VALUATION PRINCIPLES
The accounting and valuation principles detailed below remain unchanged
on those used last year. The structure of the balance sheet is consistent
with the EU accounting directives and accords with that used in previous
years.
INTANGIBLE ASSETS
Software and similar assets are capitalized at cost and amortized on a
straight-line basis over their estimated useful life. The Group’s development
costs, which cannot be capitalized under the German Commercial Code,
are capitalized in accordance with IAS 38 to the extent that they meet the
requirements stated therein. They are capitalized at incurred cost.
Amortization is charged on a straight-line basis and corresponds to
the period during which the developed products are likely to be sold. The
following amortization rates are applied:
Software 14% to 66% p.a.
Development costs 33% to 50% p.a.
PROPERTY, PLANT AND EQUIPMENT
Property, plant, and equipment are reported under the net value method.
At the time of the first-time consolidation as at December 31,
1997, hidden reserves in land and buildings discovered as the result of a
valuation survey were disclosed and capitalized. There were no hidden
reserves in other items of property, plant, and equipment. Production facilities
and machinery as well as other equipment, factory and office equipment
are reported at cost less depreciation. When the remaining shares in
Loewe Telecom GmbH were acquired last year, hidden reserves in tools
written off but still being used were disclosed and written off in full by the
year-end. Assets under finance leases are capitalized in accordance with
IAS 17.
Investments acquired during the financial year are reported at cost.
Buildings are depreciated on a straight-line basis over their estimated
useful life. Production facilities, machinery, other equipment, factory
and office equipment as well as capitalized leased assets are depreciated
over their useful life, in some cases on a straight-line basis and in other
cases under the declining-balance method. For the sake of simplification,
investments acquired in the first half of the year are depreciated at the full
annual rate, and those acquired in the second half at half the annual rate.
Minor-value assets costing less than DM 800 are immediately written off in
full. The following depreciation rates are applied:
Buildings 2.5% to 7% p.a.
Production facilities and machinery 7% to 20% p.a.
Other equipment, factory and office equipment 8% to 33% p.a.
Capitalized leased assets 20% to 25% p.a.
INVESTMENTS
Investments are capitalized at cost. Other loans, provided they are interestbearing,
are reported at cost less redemption payments.
INVENTORIES
Inventories are shown at acquisition or manufacturing cost. Manufacturing
cost includes the cost of materials and labor as well as necessary overheads.
Inventories that cannot be sold or those for which their likely selling
price, after deduction of selling costs, would not cover their acquisition or
manufacturing costs are written down accordingly.

TRADE ACCOUNTS RECEIVABLE
Trade accounts receivable are reported at their nominal value less specific
value adjustments. 2% was deducted from the net amount of receivables
(excluding sales tax) for cash discounts, corresponding to the average cash
discount in relation to sales.
OTHER SHORT-TERM ACCOUNTS RECEIVABLE
Other assets are reported at their nominal value less specific value adjustments.
Prepaid costs represent expenses relating to a specific period after
the balance sheet date.
DEFERRED TAX ASSETS
Under IAS 12, deferred tax assets are computed on the basis of the timing
differences between the consolidated financial statements and the tax
accounts. These differences relate both to the differences between the
financial statements and tax accounts of the consolidated companies and
to differences arising as a result of the consolidation under IAS. The previously
applied tax rate of 40% was reduced to 37.5% as a result of Germany’s
new tax legislation. Deferred taxes resulting from loss carryforwards
are recognized in cases where the tax loss carryforwards can reasonably be
expected to be realized in the short term. Tax increases that would be
incurred in the event of a profit distribution from shareholders’ equity on
which corporate tax has not yet been charged are not deducted from
deferred tax assets, since, in order to optimize the Group’s tax position,
there are no plans to make such distributions.
CASH AND CASH EQUIVALENTS
Short-term securities are reported at cost; cheques, cash on hand and bank
balances are shown at their nominal value.
PROVISIONS
Pension provisions are calculated in accordance with IAS 19 (revised 1998).
These provisions are shown after deduction of the value of the assets of
Loewe Opta Unterstützungskasse e.V.
Tax provisions contain the taxes likely to be payable. Other provisions
are set aside where definite obligations exist. The level of the provisions
is set at the amounts likely to materialize.
LONG-TERM LIABILITIES
Bank loans and other liabilities are reported at their repayment amounts.
SHORT-TERM LIABILITIES
Short-term liabilities are shown at their repayment amounts.
89 2000

2000 90 Annual Financial Statements. Loewe AG
NOTES TO THE INCOME STATEMENT
The cost-of-sales method is used. In contrast to 1999, interest relating to
pension provisions is reported as interest expense rather than being shown
under personnel costs as part of manufacturing, selling and administrative
costs. The previous year’s figures have been restated accordingly.
1. SALES
Sales represent net revenues from the sale of the Company’s own products,
merchandise, and related services after deduction of the relevant costs.
Sales broken down by business and product division are as follows:
2000 1999
EUR % EUR %
thousand thousand
Televisions 238,099 65.5 233,060 75.3
Multimedia 50,868 14.0 5,782 1.9
Televisions and
multimedia 288,967 79.5 238,842 77.2
DVD players 5,961 1.6 3 0.0
Video recorders 14,529 4.0 19,174 6.2
Stereo systems
Television and
3,870 1.1 2,201 0.7
stereo accessories
Total consumer elec-
26,324 7.2 24,054 7.8
tronics and multimedia 339,651 93.4 284,274 91.9
Cordless telephones 17,312 4.8 14,210 4.6
Answering machines
Other telephones
5,329 1.5 5,403 1.7
and accessories
Total
1,297 0.3 5,638 1.8
telecommunications 23,938 6.6 25,251 8.1
Total sales 363,589 100.0 309,525 100.0

Sales by region were as follows:
2000 1999
EUR % EUR %
thousand thousand
Germany
Europe excluding
211,768 58.3 198,486 64.2
Germany 138,253 38.0 98,250 31.7
Rest of the world 13,568 3.7 12,789 4.1
Total sales 363,589 100.0 309,525 100.0
2. MANUFACTURING COSTS
The manufacturing costs of goods and services produced in order to generate
sales comprise the cost of materials for the manufacture of Loewe
products and the cost of purchased merchandise as well as the cost of
labor and materials needed to achieve these sales, unless these costs are
shown under administrative and selling expenses, which are reported separately.
They are broken down as follows:
EUR thousand 2000 1999
Raw materials and supplies 164,872 136,149
Merchandise 60,403 56,009
Personnel and other material costs 44,057 39,342
Total 269,332 231,500
3. SELLING EXPENSES
Selling expenses include the cost of advertising, freight, warranties, and
personnel and other material costs. They are broken down as follows:
EUR thousand 2000 1999
Advertising costs 23,100 16,299
Freight 10,122 7,103
Warranties 3,899 3,573
Personnel and other material costs 26,404 25,347
Total 63,525 52,322
Advertising costs increased disproportionately in comparison with the previous
year. This is mainly a result of expenses made in order to position the
Loewe brand in higher market segments. Disproportionally higher freight
costs reflect expenses made to improve the quality of shipment channels
91 2000

2000 92 Annual Financial Statements. Loewe AG
as well as higher freight charges due to increased oil prices. Also, the
higher number of individual shipments which became necessary to solve
bottlenecks in material supply caused additional costs.
4. ADMINISTRATIVE EXPENSES
The following expenses were incurred for the administration of the Group
companies:
EUR thousand 2000 1999
Personnel and social security costs 5,761 5,852
Other material costs and overheads 4,902 3,678
Total 10,663 9,530
5. OTHER OPERATING INCOME
Other operating income comprises the following:
EUR thousand 2000 1999
Billed goods and services 2,353 3,138
Rental income
Public support funds for
694 537
development projects
Income from the release
1,789 758
of provisions 3,714 2,298
Other income 1,349 1,062
Total 9,899 7,793
The decline in billed goods and services resulted largely from the lower value
of services provided for former subsidiaries. Income from the release of
provisions mainly relates to provisions either not needed or not utilized.
Last year, the corresponding provision was reported under selling expenses.

6. OTHER OPERATING EXPENSES
Other operating expenses include the expenditures needed in order to generate
operating income as well as expenses relating to other periods and
other expenses. They are broken down as follows:
EUR thousand 2000 1999
Billed goods and services;
rental income 2,943 3,806
Expenses for subsidies received 1,789 758
Allocation to provisions 1,187 502
Other operating expenses 2,425 1,337
Total 8,344 6,403
The year-on-year decline in billed goods and services corresponds to the
decrease in revenues reported under other operating income.
7. INTEREST AND SIMILAR EXPENSES
Interest expenses relate to interest paid on bank loans and loans from
Loewe Opta Unterstützungskasse e.V. For the first time, interest expenses
also include interest of EUR 0.9 million from the allocation to pension provisions.
Annual interest relating to pension provisions is now reported as
interest expense rather than being shown under personnel costs. Previous
year’s figures have been restated accordingly.
8. INCOME TAXES
Income taxes include EUR 7,675,000 in current tax liabilities and EUR
806,000 in deferred taxes.
The average effective tax rate is 40.8 % and is thus 3.3 percentage
points above the rate of 37.5 % for deferred taxes. This difference was
largely due to the inclusion of additional taxable amounts and the fact that
profits for the year 2000 were subjected to trade tax and also to corporate
tax which applied at a rate of 30% until the end of 2000, while future
earnings are taxable at a rate of 25 %.
Deferred tax expenses are broken down as follows:
EUR thousand
Increase in deferred taxes on
realizable loss carryforwards + 138
Increase in deferred tax benefits
on retained earnings + 341
Other net differences – 1,285
Total deferred taxes – 806
93 2000

2000 94 Annual Financial Statements. Loewe AG
NOTES TO THE BALANCE SHEET
9. FIXED ASSETS
The changes in fixed assets were as follows:
EUR thousand Acquisi- Aquisi- Dispos- Reclas- Depre- Book Book Depretion
and tions als sifica- ciation value at value ciation
manu- tions and end of previous and amorfacturing
amor- financial year tization
tization year in the
(cummu- financial
lative) year
I. Intangible assets
1. Software and similar
assets 8,198 1,363 892 0 6,321 2,348 1,826 835
2. Development costs 11,350 4,700 4,350 0 5,040 6,660 6,476 4,516
Total 19,548 6,063 5,242 0 11,361 9,008 8,302 5,351
II. Property, plant, and
equipment
1. Land and buildings
2. Production facilities
36,942 13 248 0 14,181 22,526 23,416 903
and machinery
3. Other equipment,
12,562 2,788 2,433 0 8,353 4,564 3,374 1,592
factory and office equipment 77,234 14,627 5,906 0 63,379 22,576 18,683 10,656
Total 126,738 17,428 8,587 0 85,913 49,666 45,473 13,151
III. Investments
1. Participating interests 22 25 0 0 0 47 22 0
2. Other loans 164 191 53 0 11 291 156 3
Total 186 216 53 0 11 338 178 3
Total fixed assets 146,472 23,707 13,882 0 97,285 59,012 53,953 18,505
Intangible assets include product and IT software and development costs.
The total cost of research and development in 2000 came to EUR 11,958
thousand (1999: EUR 11,270 thousand). Of this amount, EUR 4,700 thousand
(1999: EUR 4,687 thousand) was capitalized as development costs.
Other intangible assets primarily relate to software.
Land and buildings as well as production facilities and machinery
are mainly used for production in Kronach. Other equipment, factory and
office equipment includes office and other furniture and equipment as well
as tools used by suppliers. This item also includes assets under finance leases.
At December 31, 2000, the net book value of leased assets reported
under this item came to EUR 230 thousand (1999: EUR 341 thousand).
The amount of capital held in participating interests varies between
7% and 10% of these companies’ nominal capital. These are exclusively
long-term participations in poolings of interests for business purposes.

10. INVENTORIES
EUR thousand 2000 1999
Raw materials and supplies 16,171 7,579
Work in progress 1,500 1,270
Finished goods and merchandise 26,767 23,467
Total 44,438 32,316
The main reason for the build-up of raw materials and supplies was the
Company’s stockpiling of contingency inventories of certain parts in order
to prevent production bottlenecks and disruptions.
The growth in finished goods and merchandise was lower than the
expansion in volumes.
The acquisition and manufacturing costs of inventories include
write-downs of EUR 3,901 thousand (1999: EUR 4,048 thousand) in order
to ensure the loss-free valuation of finished goods and merchandise in
accounting for obsolete and excess inventories. Write-downs of EUR 778
thousand (1999: EUR 462 thousand) on raw materials and supplies and on
work in progress have been recognized.
11. Trade accounts receivable consist entirely of accounts receivable
from the Group’s business operations.
The amount reported for trade accounts receivable includes value
adjustments of EUR 4,575 thousand for insolvency risk, cash discount
reductions, processing costs and interest.
Value adjustments for insolvency risk are measured individually.
Existing credit insurance was recognized for significant individual accounts
receivable in Germany; available letters of credit, bank guarantees and
credit insurance were recognized accordingly for international receivables.
Value adjustments include average cash discounts of 2% agreed at the
time of payment as well as (internal) administrative costs relating to the
collection of accounts receivable. The average residual maturity of receivables
is roughly 1.5 months.
12. Other short-term receivables mainly relate to sales tax, corporate
tax, capital gains tax and the solidarity surcharge (EUR 5,173 thousand),
advances for travel expenses and personnel (EUR 132 thousand), credit balances
with suppliers (EUR 364 thousand), claims on insurance companies
(EUR 73 thousand) and a residual receivable from the disposal of a 10%
equity interest in Loewe Opta Benelux N.V./S.A. (EUR 111 thousand). Prepaid
expenses relate to a discount (EUR 2 thousand) spread over the
remaining life of the loans, the cost (EUR 17 thousand) of a 5.5% interest
rate hedging contract (interest rate cap) for EUR 3.8 million with a residual
maturity of 4.5 years, and prepaid servicing costs and rents (EUR 47 thousand)
applicable to the following year.
Of the total receivables, EUR 99 thousand is due in one to five
years. The remaining receivables are due within one year.
95 2000

2000 96 Annual Financial Statements. Loewe AG
13. DEFERRED TAX ASSETS
The deferred tax assets reported in the Group include profit taxes of EUR
358 thousand on realizable loss carryforwards and timing differences of
EUR 621 thousand between the amounts reported in the tax accounts and
those recognized in the consolidated financial statements. These were calculated
on the basis of an income tax rate of 37.5% on the nominal value.
Tax increases that do not have to be accounted for but that would
be incurred if a profit distribution were made from shareholders’ equity on
which corporate tax has not yet been charged (not planned at present)
amount to EUR 1,208 thousand.
14. SHAREHOLDERS’ EQUITY
The Company’s share capital remains unchanged year on year at EUR 7,075
thousand. It is divided into 7,075,000 no-par value bearer shares. The
Company’s entire share capital is officially listed on the Frankfurt Stock
Exchange and is allowed to trade on both this exchange and in the SMAX.
Its shares are listed under security code number 649 410.
The Annual Shareholders’ Meeting of Loewe Holding GmbH (legal
predecessor to Loewe AG) on April 20, 1999 authorized the Executive
Board to increase the share capital, with the consent of the Supervisory
Board, once or more than once on or before April 20, 2004 through the
issue of new no-par value bearer shares against cash payments by up to a
total of EUR 500,000.00. The Executive Board may, with the consent of the
Supervisory Board, exclude shareholders’ pre-emptive rights. This authorization
was partially utilized to increase the share capital by EUR 75,000.00
from EUR 5,000,000.00 to EUR 5,075,000.00 in order to issue staff shares
in accordance with the resolution of the Executive Board of April 30, 1999
and with that of the Supervisory Board of the same day; this increase was
entered in the Commercial Register with effect from July 2, 1999. The
above authorization based on authorized capital now amounts to EUR
425,000.00.
The share capital is conditionally increased by a further EUR
500,000.00, divided into up to 500,000 shares (conditional capital). The
conditional capital increase serves to grant pre-emptive rights to the members
of the Executive Board and the executives of the Company as well as
to managing directors and executives of affiliated companies on the basis
of a stock option program passed at the Extraordinary Shareholders’ Meeting
of the Company on June 21, 1999.
The terms and conditions governing the options are as follows:
Underlying instrument: Ordinary shares of Loewe AG with a notional par
value of EUR 1.0 each
Strike price: EUR 18.00 (issue price of Loewe shares on July 7, 1999)
Term to maturity: July 1, 1999 to June 30, 2005
Exercise period: July 1, 2001 to June 30, 2005
Conditions of exercise:
– The option holder must be in employment with Loewe (without having
given notice).
– The price of the Loewe shares must be at least 25% above their issue
price of EUR 18.00 (= EUR 22.50).
– The options can be exercised half-yearly within two weeks of the 11th
business day following publication of the Company’s annual or semiannual
financial results up to the following limits:
– Up to 25% of the option rights no earlier than July 1, 2001;
– Up to 50% of the option rights no earlier than July 1, 2002;
– Up to 75% of the option rights no earlier than July 1, 2003;
– Up to 100% of the option rights no earlier than July 1, 2004.

In accordance with the relevant accounting principles, no personnel
costs were offset against the stock option program.
The establishment of a statutory reserve in accordance with § 150
(1) and (2) of the German Joint Stock Corporation Act is not necessary owing
to the size of the existing capital reserve.
EUR 2,500 thousand has been allocated to other retained earnings
from the net income for 2000.
The changes in shareholders’ equity are shown in the following table:
EUR thousand Subscribed Capital Other Profit or Total sharecapital
reserve retained loss carried holders’
earnings forward equity
Balance at January 1, 1999
Capital increase by way of
256 13,549 1,485 15,290
conversion of reserves 4,744 – 4,744 0
Capital increases 2,075 34,826 36,901
Net income for 1999 5,304 5,304
Balance at December 31, 1999 7,075 43,631 6,789 57,495
Net income for 2000 12,038 12,038
Allocation to other retained earnings 2,500 – 2,500 0
Balance at December 31, 2000 7,075 43,631 2,500 16,327 69,533
Proposed dividend distribution – 6,014 – 6,014
7,075 43,631 2,500 10,313 63,519
15. MINORITY INTERESTS
Minority interests exist at Loewe Opta GmbH, Kronach (1%), and at Loewe
Opta Benelux N.V./S.A. (10%). This item changed as follows:
EUR
thousand
Balance at January 1, 2000 295
Disposal of 10% of Loewe Opta Benelux N.V./S.A. 139
Profit increase in 2000
Profit decrease due to profit distribution at
279
Loewe Opta GmbH – 71
Balance at December 31, 2000
thereof:
642
Loewe Opta GmbH 349
Loewe Opta Benelux N.V./S.A. 293
642
97 2000

2000 98 Annual Financial Statements. Loewe AG
16. Pension provisions relate to individual and collective commitments to
pay pensions to employees. In 1997, these commitments were transferred
in part to a support fund which, as a registered association, is independent
of Loewe Opta GmbH. If the assets of Loewe Opta Unterstützungskasse
e.V. prove insufficient to meet these commitments, Loewe Opta GmbH is
liable.
In November 2000, further current pension obligations resulting
from individual and collective commitments were transferred to Loewe Pensionsgesellschaft
mbH as part of a universal succession. At the same time,
the Company was provided with the funds needed to meet its commitments.
The computation of these funds was based on a long-term capital
market interest rate of 5.5%. Future annual pension increases of 2% were
assumed. The purpose of this hive-off was to separate the active companies’
operational business from the administration of pension commitments
and related assets. The share capital of Loewe Pensionsgesellschaft mbH is
wholly owned by Loewe Opta GmbH. For this reason, it was included in
the consolidation. If the assets of Loewe Pensionsgesellschaft mbH prove
insufficient to meet these commitments, Loewe Opta GmbH is liable.
The pension commitments have been calculated for both balance
sheet dates based on the following assumptions:
% 2000 1999
Discount rate
Anticipated annual increases in wages
5.0 4.5
and salaries 2.5 2.0
Anticipated annual increases in pensions 1.5 1.0
Provisions are reported as follows:
EUR thousand 2000 1999
Net present value of commitments 36,895 37,238
less assets of the support fund 9,864 11,419
Provision 27,031 25,819
The net present value of commitments was determined for both balance
sheet dates on the basis of actuarial valuations under the projected unit
credit method in accordance with IAS 19 (revised 1998).

Roughly 45% of the assets of Loewe Opta Unterstützungskasse
e.V. were invested in securities funds for the first time in 2000. The assets
of these funds consist primarily of shares issued by multinational companies.
In addition, the support fund granted a short-term loan of EUR 5.4
million to Loewe AG as at year-end 2000, which is reported under other
liabilities. The securities are shown at their market prices as at December
31, 2000. Accounts receivable from Loewe AG and bank deposits are
reported at their nominal value.
The cash and cash equivalents of Loewe Opta Unterstützungskasse
e.V. are mainly lent to Loewe AG in the form of short-term, interest-bearing
loans.
At the balance sheet date, the assets of Loewe Pensionsgesellschaft
mbH were invested in short-term, interest-bearing bank deposits.
The changes in pension provisions were as follows:
EUR EUR
thousand thousand
Balance at January 1, 2000 25,819
a) Pension payments in 2000
Utilization of assets of
– 1,988
Loewe Opta Unterstützungskasse e.V. 1,288 – 700
25,119
b) Income-relevant changes
Reported under interest expenses
– Interest expense for own commitments 953
Reported under manufacturing, selling and
administrative costs
– Current service cost 490
– Additional service cost 640
– Actual gains
– Income-relevant changes at Loewe Opta
Unterstützungskasse e.V. resulting from
– 451
expected and actual gains and losses. 280 959
Balance at December 31, 2000 27,031
99 2000

2000 100 Annual Financial Statements. Loewe AG
Actuarial gains and losses are recognized as incurred. The scheduled offsetting
option within the range prescribed by IAS 19 § 92 was not utilized.
Interest expenses for the Company’s own commitments were reported for
the first time as interest expenses and not under manufacturing, selling
and administrative costs. The prior-year figures were restated as follows:
EUR thousand
Interest expense 919
Manufacturing costs – 498
Selling costs – 219
Administrative costs – 202
Pension payments comprise the following:
EUR thousand
Pension payments by Group companies 598
Pension payments by the support fund 1,390
Total pension payments 1,988
The support fund financed the pension payments from the aforementioned
interest income and a payment of EUR 102 thousand by Loewe Opta GmbH.
17. Tax provisions relate to income taxes payable under national law.
18. Other provisions comprise the following:
EUR thousand 2000 1999
Annual sales compensation 17,344 16,343
Cost of warranties 5,481 5,389
Personnel costs 6,570 4,944
License fees 5,100 2,273
Other 8,524 8,840
Total other provisions 43,019 37,789
0

Provisions for annual sales compensation were determined on the basis of
the agreements covering bonuses and other compensation, and apply
largely to Germany. Provisions for warranties were calculated on the basis
of warranty costs incurred in the past, allowing for products’ contractual
warranty periods. Provisions for personnel costs essentially comprise holiday
pay, anniversary bonuses, and variable remuneration. License fee provisions
were set aside for any payments necessitated by infringements of
industrial rights.
19. LIABILITIES
EUR thousand Dec 31, 2000 Dec 31,1999
Long-term liabilities 5,417 6,768
thereof: owed to banks (5,338) (6,619)
owed to third parties
thereof: due in
(79) (149)
– 1 to 5 years (3,863) (4,316)
– more than 5 years
thereof: secured by
(1,554) (2,452)
land charges (5,338) (6,619)
Trade accounts payable
thereof: due in
39,787 24,831
– less than 1 year (39,787) (24,831)
Other short-term liabilities
thereof: due in
15,138 18,629
– less than 1 year (15,138) (18,629)
Short-term bank loans (1,858) (2)
Short-term portions of
long-term debt (1,351) (4,003)
thereof: owed to banks (1,282) (1,282)
owed to third parties
thereof: secured by
(69) (2,721)
land charges (1,282) (1,282)
Additional short-term
liabilities (11,929) (14,624)
thereof: resulting from taxes
relating to social
(2,595) (1,898)
security (1,355) (1,028)
Total liabilities 60,342 50,228
101 2000

2000 102 Annual Financial Statements. Loewe AG
LONG-TERM LIABILITIES
Long-term liabilities relate to bank loans and liabilities under leases.
The bank loans were granted to Loewe Opta GmbH and are
repayable in German currency. The year-on-year changes in the amounts
reported stem from scheduled repayments.
Liabilities of EUR 79 thousand are shown for the leased assets of
EUR 230 thousand reported as fixed assets.
OTHER SHORT-TERM LIABILITIES
Other short-term liabilities relate to loans from Loewe Opta Unterstützungskasse
e.V. totaling EUR 5,380 thousand, tax liabilities, and compulsory
social security contributions. All amounts reported as short-term liabilities
are due in less than one year.
CONTINGENCIES AND OTHER FINANCIAL OBLIGATIONS
Contingencies and other financial obligations are broken down as follows:
EUR thousand Dec 31, 2000 Dec 31,1999
Liabilities from the issue and transfer
of bills of exchange 15 13
Liabilities from tenancy and servicing
agreements and leases
– due in 2001 2,382
(previous year: 2000) 1,451
– due between 2002 and 2005 2,800
(previous year: between 2001 and 2004) 1,446
There is an additional purchase price obligation of EUR 511 thousand
towards the seller of the shares in Loewe Telecom GmbH acquired in 1999
in the event that a cooperation agreement is signed with a technology
partner on or before March 31, 2001.
Outstanding contributions for affiliated companies pursuant
to § 24 of the German Private Limited Companies Act amount to EUR
40 thousand.

OTHER INFORMATION
There are cash credit lines of EUR 39,800 thousand for short-term loans.
Separate lines for the issuance of letters of credit exist in the amount of
EUR 2,600 thousand. No commitment fee is paid for the binding commitment
of such credit lines. The credit lines have been committed until further
notice or are open for up to one year.
STAFF AND PERSONNEL COSTS
The average number of employees is as follows:
Employees 2000 1999
Industrial workers 487 480
Salaried employees 528 516
Employees as defined by § 285 Sec. 7 HGB 1,015 996
Trainees 91 91
Total employees 1,106 1,087
The number of employees rose year on year by 19 persons, or 2%; sales
volume grew by 17% over the same period.
The total personnel costs included in the aforementioned operating
expenses are broken down as follows:
EUR thousand 2000 1999
Wages and salaries
Compulsory social security contributions,
44,402 40,654
pensions, and other employee benefits 8,399 8,194
Total 52,801 48,848
103 2000

2000 104 Annual Financial Statements. Loewe AG
CASH FLOW
The net cash of EUR 31,103 thousand provided by current operating activities
mainly comprises profit of EUR 20,798 thousand from ordinary activities,
depreciation and amortization of EUR 18,505 thousand tax payments
of EUR 7,907 thousand and an increase in net current assets of EUR 1,292
thousand.
The year-on-year advance of EUR 2,737 thousand in net cash provided
by current operating activities stems largely from the EUR 5,964
thousand rise in profit from ordinary activities, the EUR 2,262 thousand
increase in depreciation and amortization, and growth in net current assets
that was down by EUR 909 thousand year on year; these items were partly
offset by higher tax payments of EUR 7,549 thousand.
The net cash of EUR 23,347 thousand used by investing activities,
which was up by EUR 5,396 thousand year on year, was attributable to the
greater volume of capital spending in 2000, particularly on manufacturing
capacity increases and rationalization and on new products.
The net cash of EUR 8,424 thousand used by financing activities
relates to scheduled repayments of long-term bank loans, of a loan from
Loewe Opta Unterstützungskasse e.V. and of other long-term credit. The
figures for 1999 were influenced by the capital increase in connection with
the initial public offering and by the repayment of loans.
Cash and cash equivalents of EUR 8,419 thousand were down by
EUR 668 thousand year on year.
SEGMENTAL REPORTING
The Group’s activities are split into three divisions: consumer electronics,
multimedia and telecommunications (primary segments as defined by IAS
40).
The consumer electronics and multimedia divisions form part of
the subgroup Loewe Opta GmbH, while the telecommunications division
belongs to Loewe Telecom GmbH. The consumer electronics division sells
internally manufactured television sets worldwide, as well as purchased
video recorders and other products. The multimedia division has been built
up from scratch since 1998 and manufactures multimedia television sets
which it sells primarily in Germany. The telecommunications division focuses
on the purchase, project management and sale of telephones and
answering machines.

The segmental results by division are shown below.
EUR thousand Consumer Multi- Telecom- Total
electronics media munications
Sales 288,783 50,868 23,938 363,589
Expenses 268,619 48,751 24,337 341,707
Segment earnings
before interest,
extraordinary
expenses and tax
(EBIT) 20,164 2,117 – 399 21,882
Interest – 857 – 153 – 74 – 1,084
Segment earnings
before extraordinary
expenses and tax 19,307 1,964 – 473 20,798
Reconciliation
to consolidated
net income – 8,481
Minority interest,
including profit
distribution – 279
Consolidated
net income 12,038
The multimedia division generated its first profit in 2000. The loss incurred
by the telecommunications division largely reflects problems with the availability
of goods, delays in the launch of new products, and more expensive
product procurement as a result of the stronger US dollar.
All three divisions operate primarily in Europe, with the main focus
on Germany. The production facilities for the consumer electronics and
multimedia divisions are located in Germany, while telecommunications
products are manufactured by subcontractors in Asia.
105 2000

2000 106 Annual Financial Statements. Loewe AG
Segment assets comprise all the assets used by a division’s business
operations. The distinction between consumer electronics and multimedia,
on the one hand, and telecommunications, on the other, is determined by
the individual or subgroup accounts prepared for each division. The assets
of Loewe AG and of consolidations relate to consumer electronics and multimedia
and have been allocated accordingly. Now that the consumer electronics
and multimedia businesses share production and sales resources,
the assets of both divisions are reported together.
Significant assets outside Germany are held only at Loewe Opta
Benelux N.V./S.A., Belgium, in the amount of total EUR 12.037 thousand
gross and EUR 2.926 thousand net.
Segment assets are shown below.
EUR thousand Consumer Tele- Loewe AG Consoli- Total
electronics/ commu- dations
Multimedia nications
Book value of segment assets 178,317 5,299 74,097 – 52,581 205,132
Segment liabilities 147,517 4,513 14,671 – 31,744 134,957
Net segment assets 38,589 – – 59,426 20,837 –
Acquisition cost of fixed assets 69,389 786 0 0 70,175
Depreciation and 154,303 1,994 156,297
amortization in 2000 18,091 414 18,505
MANAGEMENT BODIES OF THE PARENT
COMPANY LOEWE AG
SUPERVISORY BOARD
The following were appointed to the Company’s first Supervisory Board on
April 20, 1999:
PROF. DR. EBERHARD SCHEFFLER
Auditor, Hamburg
Chairman of the Supervisory Board
DR. LOTHAR SPÄTH
Chairman of the Management Board of Jenoptik AG, Jena
Deputy Chairman of the Supervisory Board
KARL FÖSSEL
Toolmaker, Kronach

BERND HABICHT
Business economist, Administrative staff, Kronach
PROF. DR. ROLF-DIETER LEISTER
Management consultant, Lucerne
HELMUT RICKE
Businessman, Krefeld
EXECUTIVE BOARD
The following are Members of the Company’s Executive Board:
DR. RAINER HECKER
Industrial economist, Kronach
Chairman of the Executive Board
DR. BURKHARD BAMBERGER
Business economist, Frankfurt am Main
KLAUS DEISLER
Businessman, Kronach
GERHARD SCHAAS
Engineer, Rödental
The Executive Board also constitutes the management of Loewe Opta
GmbH. Dr. Hecker continues to hold the post of managing director at
Loewe Telecom GmbH. Mr. Deisler sits on the executive board of Loewe
Benelux N.V./S.A.
The other offices held by members of the Supervisory Board are
listed on pages 108 and 109; those held by members of the Executive
Board are shown on page 108.
The total emoluments of the Company’s Executive Board came to
EUR 1,322 thousand (1999: EUR 1,265 thousand). The total emoluments of
the Supervisory Board amounted to EUR 70 thousand (1999: EUR 84 thousand).
Following the decision of the Supervisory Board of December
8, 2000, Mr. Thomas Bender will be a member of the Executive Board of
Loewe AG as of April 1, 2001.
SHARES HELD BY THE EXECUTIVE BOARD AND THE
SUPERVISORY BOARD AS AT DECEMBER 31, 2000
At December 31, 2000, the Executive Board held 1,074,732 shares in
Loewe AG. The Executive Board also holds 150,000 options from the Company’s
stock option program. The Supervisory Board holds 1,130 shares.
Kronach, February 2001
The Executive Board
Dr. R. Hecker Dr. B. Bamberger K. Deisler G. Schaas
107 2000

2000 108 Management Bodies. Loewe AG
EXECUTIVE BOARD
DR. RAINER HECKER
Industrial economist, Kronach
Chairman of the Executive Board of Loewe AG
Other offices held:
Gesellschaft für Unterhaltungs- und Kommunikationselektronik
(gfu), Frankfurt
(Chairman of the Supervisory Board)
DR. BURKHARD BAMBERGER
Business economist, Frankfurt am Main
KLAUS DEISLER
Businessman, Kronach
GERHARD SCHAAS
Enegineer, Rödental
Other offices held:
SZ Testsysteme AG, Amerang
(Deputy Chairman of the Supervisory Board)
SUPERVISORY BOARD
PROF. DR. EBERHARD SCHEFFLER
Auditor, Hamburg
Chairman of the Supervisory Board
Other offices held:
Loewe Opta GmbH, Kronach
(Chairman of the Supervisory Board)
Europa Carton AG, Hamburg
(Member of the Supervisory Board)
Eagle Star European Life Assurance Company Ltd., Dublin/Ireland
(Member of the Supervisory Board or of the comparable
international supervisory body)
DR. LOTHAR SPÄTH
Chairman of the Management Board of Jenoptik AG, Jena
Deputy Chairman of the Supervisory Board
Other offices held:
SÜBA Bau AG, Hockenheim
(Chairman of the Supervisory Board)
caatoossee AG, Stuttgart
(Chairman of the Supervisory Board)
Herrenknecht AG, Schwanau
(Chairman of the Supervisory Board)
Contara AG, Stuttgart
(Member of the Supervisory Board)
Lambda Physik AG, Göttingen
(Member of the Supervisory Board)
I-D Media AG, Berlin
(Member of the Supervisory Board)
DEWB Deutsche Effecten- und Wechsel-Beteiligungsgesellschaft
AG, Jena
(Chairman of the Supervisory Board)

M + W Zander Holding AG, Stuttgart
(Chairman of the Supervisory Board)
JENOPTIK EXTEL AG, Jena
(Chairman of the Supervisory Board)
SÜBA Beteiligungs AG, Vienna
(Chairman of the Supervisory Board or of the comparable
international supervisory body)
unaxis AG, Zurich
(Member of the Board of Directors or of the comparable
international supervisory body)
KARL FÖSSEL
Toolmaker, Kronach
Other offices held:
Loewe Opta GmbH, Kronach
(Member of the Supervisory Board)
BERND HABICHT
Business economist, Administrative staff, Kronach
Other offices held:
Loewe Opta GmbH, Kronach
(Member of the Supervisory Board)
PROF. DR. ROLF-DIETER LEISTER
Management consultant, Lucerne
Other offices held:
Loewe Opta GmbH, Kronach
(Member of the Supervisory Board)
Berlinwasser Holding AG, Berlin
(Chairman of the Supervisory Board)
BÖWE Systec AG, Augsburg
(Member of the Supervisory Board)
Deutsche Beteiligungs AG, Frankfurt
(Deputy Chairman of the Supervisory Board)
DaimlerChrysler Services AG, Berlin
(Member of the Supervisory Board)
AU-System, Stockholm
(Member of the Supervisory Board)
Südwestdeutsche Medien Holding GmbH, Stuttgart
(Member of the extended Supervisory Board)
ASCOM AG, Berne
(Member of the Board of Directors)
HELMUT RICKE
Businessman, Krefeld
Other offices held:
Loewe Opta GmbH, Kronach
(Deputy Chairman of the Supervisory Board)
IHH Industrie- und Handelsholding AG, Osnabrück
(Deputy Chairman of the Supervisory Board)
109 2000

2000 110 Independent Auditors’ Report. Loewe AG
INDEPENDENT AUDITORS’ REPORT
We have audited the consolidated financial statements – consisting of the
balance sheet, income statement, statement of changes in shareholders’
equity, cash flow statement and notes to the consolidated financial statements
– prepared by Loewe AG, Kronach, for the business year from January
1 to December 31, 2000. The preparation and content of the consolidated
financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion, based on our audit, as to
whether the consolidated financial statements are consistent with the
International Accounting Standards (IAS).
We conducted our audit of the consolidated financial statements
in accordance with the International Standards on Auditing (ISA), German
auditing principles and the German generally accepted standards for the
audit of financial statements promulgated by the Institut der Wirtschaftsprüfer
(IDW/Institute of German Auditors). Those standards require that
we plan and perform the audit such that we can detect with reasonable
assurance whether the consolidated financial statements are free of material
misstatements. The evidence supporting the disclosures in the consolidated
financial statements is examined primarily on a test basis within the
framework of the audit. The audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true
and fair view of the net assets, financial position, results of operations and
cash flows of the Group during the business year in accordance with the
International Accounting Standards (IAS).
Our audit, which covered the Group management report prepared
by the management for the business year from January 1 to December 31,
2000, has not led to any reservations. In our opinion, the Group management
report on the whole provides a suitable understanding of the Group’s
position and suitably presents the risks of future development. Furthermore,
we confirm that the consolidated financial statements and the
Group management report for the business year from January 1 to December
31, 2000 meet the requirements exempting the Company from the
obligation to prepare consolidated financial statements and a Group
management report in accordance with German law.
Mönchengladbach, March 24, 2001
Abstoß & Wolters
Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft
Grage Straaten
Auditor Auditor

FINANCIAL CALENDAR
PUBLICATION OF KEY FIGURES FOR THE 2000
FINANCIAL YEAR
Monday, January 22, 2001
CeBIT
March 22 – 29, 2001 in Hanover
INVESTORS’ DAY AT CeBIT
Friday, March 23, 2001 in Hanover
PUBLICATION OF THE 2000 FINANCIAL STATEMENTS
OF THE LOEWE GROUP
10 a.m., Thursday, April 26, 2001, Munich
ANALYSTS’ CONFERENCE
4 p.m., Thursday, April 26, 2001, Frankfurt
PUBLICATION OF THE GROUP REPORT FOR Q1 2001
Monday, May 21, 2001
ANNUAL SHAREHOLDERS’ MEETING OF LOEWE AG
IN THE GRAND HOTEL ESPLANADE
Tuesday, June 26, 2001 in Berlin
PUBLICATION OF THE GROUP REPORT FOR Q2 2001
Monday, August 20, 2001
INTERNATIONALE FUNKAUSSTELLUNG
August 25 – September 2, 2001 in Berlin
PUBLICATION OF THE GROUP REPORT FOR Q3 2001
Thursday, November 15, 2001
PUBLICATION OF KEY FIGURES FOR THE 2001
FINANCIAL YEAR
Monday, January 21, 2002
111 2000

2000 112 Financial Calendar
CONTACTS
LOEWE AG
Industriestrasse 11
D-96317 Kronach
PO box 1554
D-96305 Kronach
Telephone switchboard: +49 (0) 92 61/99-0
Public relations: +49 (0) 92 61/99-217
Investor relations: +49 (0) 92 61/99-771
Fax: +49 (0) 92 61/99-994
E-mail: loewe@loewe.de
Internet: www.loewe.de
Ticker symbol: LOE
Security code number: 649410
ISIN code: DE 0006494107
Stock market trading with official listing and
participation in the SMAX
Indices: SDAX
SMAX
MSCI Morgan Stanley Capital International Small Cap
CDAX General
CDAX Technology
PRODUCTION CREDITS
Published by: Loewe AG, Kronach
Photography: Michael Wiegmann, Cologne
English translation: ETS-English Translation Services GmbH, Frankfurt
Printing: Druckhaus Kirchner, Kirchlengern

LOEWE AG
Industriestrasse 11
D-96317 Kronach
Phone +49 (0) 92 61/99-0
Fax +49 (0) 92 61/9 5411
E-mail loewe@loewe.de
Internet www.loewe.de