• Consolidated sales advance by 21 percent to Euro 253 million
• EBIT at Euro 12.1 million more than doubled in comparison with 2005
• Earnings after taxes at Euro 9.9 million (2005: Euro 0.2 million)
• A very dynamic development of the Sports Segment
• Further ambitious growth in earnings anticipated in 2007

The media company EM.TV AG with an SDax listing had a successful year in 2006 and exceeded its own sales and earnings objectives – significantly in certain cases. The Sports Segment in particular achieved a very encouraging level of business also assisted by the extensive engagement of the sports companies with the 2006 FIFA World CupTM, the most important event of the year. As far as 2007 is concerned, the Management Board is anticipating a further significant increase in earnings and the overall profitability of the Group. As a result of the refinancing of the Group’s financial debt in the first half of 2006, EM.TV AG has acquired additional scope and flexibility for further growth.

Werner E. Klatten, Chairman of the Management Board of EM.TV AG: “Our expectations were exceeded in 2006. EM.TV has grown considerably and has made significant progress with regard to its earnings power. Our sports companies have shown their intrinsic capabilities in particular. The media industry is changing radically at present as a result of the triumphant march of digitalization. New distributions channels such as video on demand, mobile contents and Web-TV are changing user habits and are relativizing the role of classical television. EM.TV is both technologically and also financially well equipped to deal with the aforesaid trends. Our aim is to grow further in the coming years and to expand our position as a medium-sized media house which can be the partner for a large number of companies.”

Consolidated sales and earnings of the EM.TV Group in 2006br />

• Sales in 2006 rose by 21.0 percent to Euro 253.4 million in comparison with the previous year (Euro 209.5 million), thereby exceeding the target of Euro 250 million. Adjusted by the initial full consolidation of the audiovisual service provider Creation Club (CC) GmbH, acquired at the end of 2005, and the Australian production company Flying Bark Productions PTY. Ltd., Group sales increased by 11.1 percent.
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) reached Euro 32.7 million, i.e. an increase of 54.3 percent in comparison with the previous year’s amount of Euro 21.2 million. The target range of Euro 27 to 30 million was significantly exceeded therefore. The earnings increase which was disproportionately high in comparison with the sales growth was attributable to only moderate increases in the major cost items. Efficiency gains and improved cost structures had a positive effect, especially in the Sport segment.
• Earnings before interest and taxes (EBIT) at Euro 12.1 million were likewise significantly higher than the target range of Euro 8 to 10 million. It was more than doubled in comparison with the previous year at Euro 5.7 million. The EBIT margin based on sales rose from 2.7 percent in the previous year to 4.8 percent in the report year.
• Earnings before taxes (EBT) amounted to Euro 3.0 million compared with Euro 0.8 million in 2005. This included the one-off and non-liquidity-related special charge of Euro 3.1 million incurred in the second quarter in connection with the voluntary premature repayment of the 8% bond with warrants attached 2004/2009. EBT were also affected by the full write-down (Euro 2.2 million) of a minority interest already made in the first quarter.
• Earnings after taxes and minority interests amounted to Euro 9.9 million (2005: Euro 0.2 million). A tax refund of Euro 6.8 million (2005: tax refund of Euro 0.3 million) played a major part in the aforesaid respect. This was mainly attributable to releases of tax provisions by a subsidiary, tax refund claims in respect of the AG, the capitalization of tax loss carry-forwards in EM.TV AG and differences in the valuation of fixed assets between the tax and commercial balance sheets.

Consolidated balance sheet and cash-flow of the EM.TV Group in 2006

• At Euro 189.8 million, the shareholders’ equity of the Group was Euro 36.2 million higher than the value on the same closing date of the previous year (Euro 153.6 million). In addition to the higher level of earnings in the report year, the reasons for the substantial increase were the inflow of funds from exercising the option rights in connection with the 8% bond with warrants attached 2004/2009 and from exercising subscription rights in connection with certificates. The equity ratio increased slightly to 49.8 percent (December 31, 2005: 48.6 percent).
• Liquid assets rose significantly from Euro 45.8 million to Euro 132.3 million. This was attributable to the issue of the 5.25% convertible bond 2006/2013 made in the second quarter, to inflows of funds from the exercise of option rights and to the cash-flow from operating activities. The above items were offset by the outflow of funds in connection with the repayment of the 8% bond with warrants attached 2004/2009..
• The cash-flow from operating activities reached Euro 61.4 million after there had been an outflow of funds in the amount of Euro 4.0 million in the previous year. The increased earnings for the year despite higher depreciation of fixed assets, the reduction in accounts receivable, especially those in connection with the FIFA project, and higher liabilities were the main reasons for the improvement. The cash-flow in the report period amounted to Euro 92.3 million compared with a negative cash-flow of Euro 66.4 million in the previous year.

Information on the operating segments

Sports Segment
The Sports Segment consists of the Free-TV station DSF, Germany’s leading sport-online platform Sport1 and the production service provider PLAZAMEDIA. The exclusive European marketing rights for the merchandising of the 2006 FIFA World Cup™ also form part of this segment.

The Sports Segment increased its sales by 24.7 percent from Euro 177.8 million in the previous year to Euro 221.7 million in the report year. The segment earnings increased from Euro 10.1 million up to Euro 18.5 million, which is equivalent to a rise of 83.2 percent.

All three sports companies improved their earnings position.

• DSF stabilized its sales on an already high level. Also, the ratio of 57/43 percent between the two revenue pillars, namely advertising (classical advertising, sponsoring and special advertising forms) and T-Commerce (DRTV/CPO, value-added services and call-in) remained almost unchanged in comparison with the previous year. Not least thanks to an efficient program and cost optimizations, the station achieved its best result since its formation in 1993.
• PLAZAMEDIA recorded a substantial increase in sales which were mainly achieved by production services in the environment of 2006 FIFA World CupTM and also by the first-time inclusion of Creation Club (CC) GmbH.
• In the World Cup year, Sport1 recorded an increase in visits of more than 40 percent compared with 2005, along with a sales jump of 47 percent. <

Entertainment Segment
The Entertainment Segment combines business with high-class children and youth programs. Despite a further difficult international environment, sales were slightly increased from Euro 30.6 million in the previous year to Euro 31.4 million (+2.6 percent). The increase in sales is, inter alia, attributable to effects in connection with the full consolidation of Flying Bark Productions PTY. Ltd. At Euro 0.6 million, the segment results remained below the level of the previous year (Euro 5.7 million) caused among others by the postponement of sales and delay in new productions.

Others Segment
This segment particularly shows the sales and earnings of EM.TV AG as a holding company. The loss for the year was reduced by a third from Euro -10.0 million to Euro -6.7 million on account of the further significant reduction of in the cost structure.

Prospects for 2007
The strategic objective is to be able to achieve stable sales in both operating segments and to increase profitability. M&A activities are also conceivable for the aforesaid purpose, whereby purchases are subject to meeting strict risk and profitability criteria.

The extension of network effects between the sports companies is being progressed in the Sports Segment by offering ”Solutions from one source”.

In addition, the operating models of the sports companies are being directed to new sales sources such as Video on Demand, Mobile and Games in order to take account of the changed media usage. The development of technologically innovative products and services as part of the digitalization and also the internationalization of business transactions are additional matters of strategic importance.

The Entertainment Segment is involved with progressing the production of additional high-class formats in the children and youth sector and developing new distribution channels such as offers for the digital sector, IPTV, Video on Demand or Mobile. The aim is also to improve access to international license rights markets. The subsidiary company EM.Entertainment GmbH is also planning an introduction into the promising “Family Musicals” sector, however, associated with relatively low production investments.

On a Group level, the Management Board is setting for 2007 a consolidated sales objective of approximately Euro 250 million subject to unforeseen events. The lapse of the major sales contributions by 2006 FIFA World CupTM is to be compensated by growth in other fields.
The earnings situation of the Group is to be increased significantly once again. For EBITDA the objective is to reach a range of Euro 36 to 40 million (representing an increase of 10 to 22 percent in comparison with 2006). With EBIT, a range between Euro 14 and 16 million
The medium-term financial objective of the Management Board is to increase its EBIT annually by an average of 20 percent.

Major Key Ratios at a Glance on EM.TV.