Consolidated Financial Statements - L. Possehl & Co. mbH

Shares in Süd-Chemie sold off
At the beginning of the current fi scal year 2006, we sold off our
block of shares of about 10 % held in Süd-Chemie AG. The cash fl ow
resulting from the sale is now available to us for the further expansion
of our Group.
World economy will continue to grow
We are assuming that the worldwide upswing will continue undiminished
for the next two years. The positive trend will continue to be carried
primarily by the USA as well as by the newly industrializing countries
China and India. Increasing growth rates are also anticipated for
the Euro zone, even though these rates will lag behind those of the
American and Asian rates. According to current predictions, economic
development in Germany will decline again as early as the year 2007
due to the impending tax increases.
Possehl remains on a profi table course of growth
Due to its broad composition, Possehl will profi t from the pleasing economic
development occurring worldwide. We are going on the assumption
of Group sales of about € 1.2 billion for the coming fi scal year. This
signifi cant increase will be achieved primarily because of the acquisitions
carried out at the beginning of the year 2006. But the existing
business division will also continue their profi table course of growth.
Only in International Trading do we foresee a decline in sales, due to the
reorganization of our American business.
Risks for the future development of the Possehl Group may result primarily
from a worldwide slowing down of the economy. The Electronics
business division is also dependent on the cyclical development of
the semiconductor industry. Because of the diversifi ed composition of
the Possehl Group and the associated balancing of risk, we are able to
compensate for rather weak developments in individual business divisions.
We see signifi cant market opportunities, in particular by making increased
use of the advantages from the Asian sites. The acquisition
of the remaining shares in our Possehl Electronics will provide us with
the additional potential for increasing growth and effi ciency here for
the entire Group.
Signifi cantly increased consolidated earnings expected
For fi scal year 2006 we anticipate signifi cantly higher consolidated
earnings. In addition to the one-time profi t from the disposal of our
Süd-Chemie participation, the new cleaning and textile fi nishing systems
business divisions will be the primary contributors.
Following the completion of restructuring, we also anticipate an
increase in earnings for the Precious Metals Processing business
division. Only in the area of International Trading do we assume
any decline in earnings, and that is due to the reorganization of the
American business.
We will continue to pursue the adopted course of growth even beyond
fi scal year 2006. In this regard, we expect a further increase in sales
for fi scal year 2007.
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