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PRESENTATION A.S. CRÉATION TAPETEN <strong>AG</strong><br />
(May 2007)<br />
1
LEGAL DISCLAIMER<br />
The information in this company presentation contains forward-looking statements which reflect the<br />
current position of the management of A.S. <strong>Création</strong> <strong>Tapeten</strong> <strong>AG</strong> regarding possible future events and are<br />
based exclusively on currently available information and a number of assumptions made by management<br />
of A.S. <strong>Création</strong> <strong>Tapeten</strong> <strong>AG</strong> that may or may not prove to be appropriate. Where such statements refer to<br />
the future, they involve known and unknown risks, uncertainties and other factors that could cause the<br />
actual results, financial position, development or performance of A.S. <strong>Création</strong> <strong>Tapeten</strong> <strong>AG</strong> (including<br />
related companies) or of the industries and markets to which such a forward-looking statement refers to<br />
differ materially from those expressly or implicitly assumed in such statements. However, it should be<br />
noted that A.S. <strong>Création</strong> <strong>Tapeten</strong> <strong>AG</strong> is not obliged to update the forward-looking statements contained in<br />
this presentation and to adopt them to reflect future events or developments.<br />
In the UK this presentation is intended for distribution only to persons of a kind described in article 11(3)<br />
(other than 11(3)(c)) of the financial services act 1986 (investment advertisements) (exemptions) order 1996<br />
(as amended). Neither this presentation nor any copy of it may be sent to or taken into the United States of<br />
America, Canada or Japan, nor may it be distributed to any us person (within the meaning of regulations<br />
under the US Securities Act of 1933). By accepting this presentation you agree to be bound by the<br />
restrictions set forth above.<br />
2
COMPANY AND SECTOR ENVIRONMENT<br />
3
A.S. CRÉATION AT A GLANCE<br />
� A.S. <strong>Création</strong> comprises 2 divisions:<br />
• Wallpaper (production)<br />
• Furnishing Fabrics (trade)<br />
� A.S. <strong>Création</strong> is the leading wallpaper manufacturer in Germany<br />
• range: approx. 6,000 different wallcovering items<br />
• production: approx. 32 million rolls p.a.<br />
• stock: approx. 9 million rolls<br />
• market share 2005: 32% of the <strong>sales</strong> of the German wallpaper<br />
manufacturers<br />
� Trading with furnishing fabrics<br />
• complementary product (interior decoration)<br />
• forward-looking trend analysis (colour and design trends)<br />
4
FISCAL YEAR 2006 AT A GLANCE<br />
2004 2005 2006<br />
€ m € m € m<br />
Sales 132.1 145.3 152.4 + 4.9%<br />
Earnings before taxes 11.0 13.0 12.7 - 2.4%<br />
Return on Sales (before taxes) 8.3% 8.9% 8.3%<br />
Net profit 6.6 7.7 10.2 + 31.4%<br />
Return on Sales (after taxes) 5.0% 5.3% 6.7%<br />
In 2006 A.S. <strong>Création</strong> generated the highest <strong>sales</strong> and net profit in its<br />
history. Earnings before taxes is slightly below previous year‘s level<br />
5
ORGANIZATIONAL STRUCTURE<br />
100%<br />
<strong>AS</strong> Creation (UK) Ltd.<br />
Formby/UK<br />
A.S. <strong>Création</strong> (France) S<strong>AS</strong><br />
Lyon/France<br />
A.S. <strong>Création</strong> <strong>Tapeten</strong> <strong>AG</strong><br />
Gummersbach/Germany<br />
100% 100%<br />
A.S. <strong>Création</strong> (NL) B.V.<br />
Werkendam/NL<br />
Two Divisions:<br />
• Wallpaper (approx. 90 % of Group <strong>sales</strong>)<br />
• Furnishing Fabrics (approx. 10 % of Group <strong>sales</strong>)<br />
100%<br />
100%<br />
100%<br />
A.S. <strong>Création</strong> Textil GmbH<br />
Gummersbach/Germany<br />
Indes Wohntextil GmbH<br />
Gummersbach/Germany<br />
FUGGERHAUS Stoffe GmbH<br />
Gummersbach/Germany<br />
6
WALLPAPER AND FABRICS ARE F<strong>AS</strong>HION<br />
7
Market segment<br />
THE BRANDS<br />
upper<br />
middle<br />
lower<br />
Wallpaper Furnishing Fabrics<br />
Division<br />
8
FACTORS FOR SUCCESS<br />
� Design and colours<br />
� Wallpaper and fabrics are fashion and lifestye products<br />
• identification of design and colour trends<br />
• innovation<br />
• product range<br />
� Services<br />
� Competitive advantages due to better services<br />
• product availability and fast delivery time<br />
• logistics<br />
• powerful marketing strategies for the PoS<br />
• „consulting/advice“ with regard to wallpaper<br />
• store fittings (esp. for DIY customers )<br />
Superior design and better services allow for higher average<br />
selling prices.<br />
9
BREAKDOWN OF SALES<br />
5 %<br />
24 %<br />
European Union<br />
Gross <strong>sales</strong> by regions<br />
2005 2006<br />
71 %<br />
27 %<br />
67 %<br />
With 67% of consolidated <strong>sales</strong> the European Union remains the<br />
most important market for A.S. <strong>Création</strong> by far. The region with the<br />
most dynamic growth in 2006 was Eastern Europe<br />
6 %<br />
Other Eastern Europe Other Countries<br />
10
COMPETITORS – SALES VOLUMES<br />
� A.S. <strong>Création</strong> € 152 m<br />
� Rasch GmbH & Co. KG, Germany € 133 m<br />
� Graham & Brown Ltd., UK € 90 m<br />
� Balta-Group, Belgium (Division wallpaper) € 70 m<br />
� Erismann & Cie. GmbH <strong>Tapeten</strong>fabrik, Germany € 65 m<br />
� Marburger <strong>Tapeten</strong>fabrik GmbH & Co. KG, Germany € 60 m<br />
� Ugépa/Lutece/Montecollino, France € 55 m<br />
(Sales are not purely due to wallpaper activities; sources: annual reports, other companies‘<br />
information and own estimates)<br />
11
MARKET TRENDS<br />
� Ongoing consolidation process (national and international)<br />
� Increasing importance of big customers/key accounts<br />
• big customers are looking for long-term partnerships<br />
− strong financial position<br />
− innovation (assortment and marketing)<br />
• growing focus on service<br />
� A.S. <strong>Création</strong> is already established in this sector<br />
� Less innovation in the industry<br />
• a lot of companies reduce expenses for product development<br />
• the number of companies that promote and further wallcoverings as a<br />
decorative product is declining<br />
� no other company in the wallpaper industry launches as many new<br />
products as A.S. <strong>Création</strong><br />
A.S. <strong>Création</strong> benefits from the consolidation process.<br />
12
A.S. CRÉATION 1974 - 2006<br />
180<br />
150<br />
120<br />
90<br />
60<br />
30<br />
0<br />
150<br />
125<br />
100<br />
75<br />
50<br />
25<br />
0<br />
1<br />
Sales (€ m) Result from ordinary activity<br />
(€ m)<br />
18<br />
34<br />
49<br />
67<br />
109<br />
145<br />
152<br />
74 80 85 90 95 00 05 06<br />
6<br />
Total assets (€ m)<br />
9<br />
12<br />
18<br />
28<br />
92<br />
111<br />
116<br />
74 80 85 90 95 00 05 06<br />
15<br />
12<br />
9<br />
6<br />
3<br />
0<br />
-3<br />
700<br />
600<br />
500<br />
400<br />
300<br />
200<br />
100<br />
0<br />
-1.0<br />
0.5<br />
1.6<br />
1.1<br />
5.2<br />
8.4<br />
13.0 12.7<br />
74 80 85 90 95 00 05 06<br />
Number of employees<br />
7<br />
160<br />
270<br />
303<br />
365<br />
530<br />
635<br />
633<br />
74 80 85 90 95 00 05 06<br />
A.S. <strong>Création</strong> has become Europe‘s leading wallpaper manufacturer.<br />
13
ANNUAL REPORT 2006<br />
14
KEY-FIGURES: P/L<br />
2005 2006 Change<br />
Sales € m 145.3 152.4 + 4.9%<br />
Total output € m 146.1 154.6 + 5.8%<br />
Gross profit € m 72.8 73.4 + 0.8%<br />
Gross profit margin 49.8% 47.5%<br />
Personnel expenses € m 31.5 32.9 + 4.4%<br />
as % of total output 21.6% 21.3%<br />
Earnings before taxes € m 13.0 12.7 - 2.4%<br />
Return on Sales (before taxes) 8.9% 8.3%<br />
Net profit € m 7.7 10.2 + 31.4%<br />
Return on Sales (after taxes) 5.3% 6.7%<br />
15
SALES<br />
€ m<br />
175<br />
150<br />
125<br />
100<br />
75<br />
50<br />
25<br />
0<br />
132.1<br />
14.0<br />
118.1<br />
Consolidated Sales<br />
145.3<br />
13.7<br />
131.6<br />
152.4<br />
14.1<br />
138.3<br />
2004 2005 2006<br />
Fabrics<br />
Wallaper<br />
The <strong>sales</strong> increase in both segments lead to the highest <strong>sales</strong> level<br />
A.S. <strong>Création</strong> has reached in its history.<br />
16
GROSS PROFIT AND GROSS PROFIT MARGIN<br />
75<br />
50<br />
25<br />
0<br />
66.6<br />
Gross profit<br />
in € m as a percentage of total output<br />
72.8<br />
73.4<br />
2004 2005 2006<br />
The gross profit margin decreased by 2.3 percentage points. In relation<br />
to the total output this equals a gap of € 3.6 m.<br />
60<br />
40<br />
20<br />
0<br />
50.0 49.8 47.5<br />
2004 2005 2006<br />
17
PERSONNEL EXPENSES<br />
40<br />
30<br />
20<br />
10<br />
0<br />
30.1<br />
in € m<br />
31.5<br />
Personnel expenses<br />
32.9<br />
2004 2005 2006<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
as a percentage of total output<br />
22.6 21.6 21.3<br />
2004 2005 2006<br />
Due to the strong increase of the total output, the relation between<br />
personnel expenses and total output improved.<br />
18
EMPLOYEES<br />
Employees (annual average, full-time equivalents)<br />
700<br />
600<br />
500<br />
400<br />
300<br />
200<br />
100<br />
0<br />
633 635 633<br />
70 69 68<br />
563 566 565<br />
2004 2005 2006<br />
Fabrics<br />
Wallpaper<br />
While <strong>sales</strong> have been increased by 15.3% over the last three years,<br />
the number of employees has remained unchanged.<br />
19
OTHER OPERATING EXPENSES<br />
20<br />
10<br />
0<br />
17.1<br />
Other operating expenses<br />
in € m<br />
19.5<br />
19.7<br />
2004 2005 2006<br />
15<br />
10<br />
5<br />
0<br />
as a percentage of total output<br />
12.8 13.3 12.8<br />
2004 2005 2006<br />
The other operating expenses are affected in 2006 by increased<br />
transport and waste disposal costs.<br />
20
EARNINGS BEFORE TAXES<br />
15<br />
12<br />
9<br />
6<br />
3<br />
0<br />
11.0<br />
Earnings before taxes<br />
in € m as a percentage of <strong>sales</strong><br />
13.0<br />
12.7<br />
2004 2005 2006<br />
Despite the higher <strong>sales</strong>, earnings before taxes are below the previous<br />
year‘s level.<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
8.3 8.9 8.3<br />
2004 2005 2006<br />
21
SEGMENT REPORTING<br />
Wallpaper Fabrics<br />
2005 2006 2005 2006<br />
€ `000 € `000 € `000 € `000<br />
Sales 131,811 138,506 14,263 14,428<br />
Earnings before taxes 12,891 12,333 82 337<br />
RoS (before taxes) 9.8% 8.9% 0.6% 2.3%<br />
Cash-Flow 15,818 15,821 210 376<br />
Number of employees 566 565 69 68<br />
The Furnishing Fabrics division has achieved a significant profit in 2006<br />
and has improved its RoS.<br />
22
NET PROFIT<br />
12<br />
9<br />
6<br />
3<br />
0<br />
6.6<br />
Net profit<br />
in € m as a percentage of <strong>sales</strong><br />
7.7<br />
10.2<br />
1.9<br />
8.3<br />
2004 2005 2006<br />
5.0 5.3 5.4<br />
Adjusted for a special tax effect, net profit for the year 2006<br />
amounted to € 8.3 m which means that it is in line with the full-year<br />
guidance (€ 8.0 m to € 8.25 m).<br />
8<br />
6<br />
4<br />
2<br />
0<br />
6.7<br />
1.3<br />
2004 2005 2006<br />
23
C<strong>AS</strong>H-FLOW<br />
€ m<br />
20<br />
15<br />
10<br />
5<br />
0<br />
Breakdown of cash-flow<br />
13.9<br />
0.5<br />
7.7<br />
16.0<br />
0.7<br />
8.2<br />
16.2<br />
0.2<br />
8.0<br />
5.7 7.1 8.0<br />
2004 2005 2006<br />
Change in long-term<br />
provisions<br />
Depreciation<br />
Profit after tax<br />
payments<br />
The development of the cash flow discloses that the special tax effect<br />
is non-cash in nature.<br />
24
KEY FIGURES: BALANCE SHEET<br />
2005 2006 change<br />
Non-current assets € m 51.5 51.9 + 0.7%<br />
Capital expenditures € m 8.9 7.4 - 16.5%<br />
Depreciation € m 8.2 8.0 - 2.2%<br />
Inventories € m 26.4 29.0 + 9.8%<br />
Inventory turnover 5.6 5.5<br />
Trade receivables € m 24.2 24.8 + 2.3%<br />
Days receivables outstanding days 56 58<br />
Total assets € m 111.0 116.3 + 4.7%<br />
Equity € m 64.8 71.5 + 10.3%<br />
Equity ratio 58.4% 61.5%<br />
Financial liabilities € m 17.9 15.8 - 11.6%<br />
Debt repayment period years 0.8 0.6<br />
25
FINANCIAL STRUCTURE<br />
46%<br />
Financial structure and total assets<br />
€ 108.9 m<br />
55%<br />
€ 111.0 m<br />
46%<br />
58%<br />
€ 116.3 m<br />
45%<br />
61%<br />
27%<br />
25%<br />
21%<br />
54% 18% 54% 17% 55% 18%<br />
2004 2005 2006<br />
Non- current assets<br />
Current assets<br />
Equity<br />
Non-current liabilities<br />
Current liabilities<br />
Due to the increased net profit the equity ratio reached 61.5%. Overall,<br />
the financial structure of A.S. <strong>Création</strong> remains very robust and healthy.<br />
26
FINANCIAL LIABILITIES<br />
€ m<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
Financial liabilities Debt repayment period<br />
21.5<br />
9.2<br />
12.3<br />
17.9<br />
4.5<br />
13.4<br />
5.5<br />
10.3<br />
2004 2005 2006<br />
Cash and cash-equivalents<br />
Net financial debt<br />
15.8<br />
years<br />
1.0<br />
0.5<br />
0.0<br />
0.9<br />
0.8<br />
0.6<br />
2004 2005 2006<br />
Net financial debt divided by cashflow<br />
Financial liabilities declined by € 2.1 m to € 15.8 m as per 31.12.2006.<br />
The debt repayment period is at a low level of 0.6 years.<br />
27
INTERIM REPORT FOR Q1 2007<br />
28
KEY-FIGURES <strong>AS</strong> OF MARCH 31, 2007<br />
Q1/2006 Q1/2007 Change<br />
Sales € m 40.4 44.5 + 10.2%<br />
Total output € m 40.1 45.2 + 12.7%<br />
Gross profit € m 19.6 21.9 + 11.7%<br />
Gross profit margin 48.9% 48.5%<br />
Personel expenses € m 8.0 8.7 + 9.0%<br />
as % of total output 19.9% 19.3%<br />
Earnings before taxes € m 3.5 4.2 + 20.9%<br />
Return on Sales (before taxes) 8.6% 9.5%<br />
Net profit € m 2.2 2.6 + 18.8%<br />
Return on Sales (after taxes) 5.4% 5.8%<br />
29
SALES<br />
Mio. €<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
39.0<br />
3.6<br />
35.4<br />
Consolidated <strong>sales</strong><br />
40.4<br />
3.6<br />
36.8<br />
44.5<br />
3.9<br />
40.6<br />
I/2005 I/2006 I/2007<br />
Fabrics<br />
Wallpaper<br />
Higher <strong>sales</strong>‘ levels in both divisions have contributed to the 10.2%<br />
increase in group‘s <strong>sales</strong> in the first quarter of 2007.<br />
30
EARNINGS BEFORE TAXES<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
3.4<br />
Earnings before taxes<br />
in € m as a percentage of <strong>sales</strong><br />
3.5<br />
4.2<br />
I/2005 I/2006 I/2007<br />
The strong increase in <strong>sales</strong> in combination with a stable gross profit<br />
margin results in an improved RoS in the first quarter of 2007.<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
8.7 8.6<br />
9.5<br />
I/2005 I/2006 I/2007<br />
31
SEGMENT REPORTING<br />
Wallpaper Fabrics<br />
I/2006 I/2007 I/2006 I/2007<br />
€ m € m € m € m<br />
Sales 36,883 40,704 3,706 3,975<br />
Earnings before taxes 3,523 4,207 - 32 14<br />
RoS (before taxes) 9.6% 10.3% - 0.9% 0.4%<br />
Cash-Flow 4,271 4,716 - 15 32<br />
Number of employees 561 572 67 67<br />
Both divisions have improved their earnings position.<br />
32
A.S. CRÉATION SHARE<br />
33
CONSUMER GOODS OR CONSTRUCTION?<br />
Use of wallpaper in Germany<br />
10 % New buildings<br />
90 % Redecoration<br />
A.S. <strong>Création</strong> share is classified as “Consumer Goods“ and not as<br />
“Construction“.<br />
34
SHARE PERFORMANCE 2002 - 2007<br />
Indexed<br />
325<br />
300<br />
275<br />
250<br />
225<br />
200<br />
175<br />
150<br />
125<br />
100<br />
75<br />
50<br />
A.S. <strong>Création</strong> and SDAX 01.01.2002 - 31.03.2007<br />
01.01.2002 = 100<br />
2002 2003 2004<br />
2005 2006<br />
— A.S. share<br />
— SDAX<br />
Since 2002 the A.S. <strong>Création</strong> share has performed similar to the SDAX<br />
and has increased value by 167.6%.<br />
35
MARKET VALUE OF A.S. CRÉATION<br />
� Price-earnings ratio<br />
31.12.05 31.12.06 31.03.07<br />
Share price € 28.30 € 36.00 € 42.30<br />
Earnings per share* € 2.78 € 3.65 € 3.21<br />
Ratio 10.2 9.9 13.2<br />
* 31.12.05 und 31.12.06: Effective; 31.03.07: Medium figure of plan for FY 2007<br />
� Market capitalization/Equity<br />
31.12.05 31.12.06 31.03.07<br />
Market capitalization € 78.8 m € 100.2 m € 117.8 m<br />
Equity € 64.8 m € 71.5 m € 74.1 m<br />
Ratio 121.6% 140.2% 159.0%<br />
Market capitalization has exceeded € 100 m while p/e-ratio is still moderate.<br />
36
DIVIDEND POLICY<br />
2004 2005 2006<br />
Earnings per share €/share 2.37 2.78 3.65<br />
Dividend €/share 1.05 1.25 1.65<br />
Payout ratio % 44.3 45.0 45.2<br />
Year-end share price €/share 23.55 28.30 36.00<br />
Dividend yield % 4.5 4.4 4.6<br />
A.S. <strong>Création</strong>‘s dividend policy aims for a high payout ratio as long<br />
as this is permitted by the company‘s financial situation.<br />
The A.S. <strong>Création</strong> share is a high-yield paper.<br />
37
SHAREHOLDER STRUCTURE<br />
� The present shareholder structure is as follows:<br />
• Mr. Franz Jürgen Schneider 29.1%<br />
• Mrs. Karin Schneider 10.1%<br />
• A.S. <strong>Création</strong> <strong>Tapeten</strong> Foundation 5.0%<br />
• Own sahres (treasury shares) 7.2%<br />
• Ratio Asset Management LLP, London 5.1%<br />
• Free-float 43.5%<br />
100.0%<br />
From the total number of shares of 3.0 million, approx. 44%<br />
are free-float.<br />
38
OUTLOOK<br />
39
TARGETS 2007<br />
� Status quo:<br />
A.S. <strong>Création</strong> is Europe‘s leading wallpaper manufacturer<br />
• <strong>sales</strong>- and earnings-level<br />
• unique product range in the industry<br />
� Economic conditions 2007:<br />
• no sustained stimulation from the macroeconomics<br />
• ongoing consolidation process in the wallpaper industry<br />
• competition will intensify<br />
� Targets 2007:<br />
• continued expansion of A.S. <strong>Création</strong>‘s competititive position<br />
• improvement of the earnings position<br />
40
ME<strong>AS</strong>URES<br />
� Continued expansion of the competitive position<br />
• Product development<br />
− innovation (product and marketing concepts)<br />
− offering the whole range of major wallcovering qualities<br />
− combination of wallcoverings and fabrics<br />
• Stronger internal growth than the market<br />
• Further acquisitions if economically viable<br />
41
PLAN: SALES<br />
€ m<br />
160<br />
120<br />
80<br />
40<br />
0<br />
145.3<br />
Consolidated Sales<br />
152.4<br />
160.0<br />
2005 2006 2007e<br />
Internal <strong>sales</strong> growth of 5% is planned for 2007.<br />
� uncertain environment esp.<br />
with regard to consumer<br />
spending<br />
� targeted gain of market share<br />
� no additional acquisitions<br />
assumed<br />
42
PLAN: NET PROFIT<br />
12<br />
8<br />
4<br />
0<br />
7.7<br />
Net profit/Earnings per share<br />
in € m in € per share<br />
10.2<br />
1.9<br />
8.3<br />
8.7<br />
to<br />
9.2<br />
2005 2006 2007e<br />
4<br />
3<br />
2<br />
1<br />
0<br />
2.78<br />
3.65<br />
0.70<br />
2.95<br />
3.12<br />
to<br />
3.30<br />
2005 2006 2007e<br />
According to the plan, net profit will exceed the adjusted figure for<br />
2006. Implications of a potential tax reform in Germany have not been<br />
taken into account.<br />
43
END OF PRESENTATION<br />
44