loewe AG, Kronach

• 2007 an outstanding year
• Extraordinary incentive bonus for all employees 
• Proposed dividend of EUR 0.27 per share 
• Sales and earnings once again surpass prior year at the beginning of 2008 

2007 an outstanding year Kronach/Munich, March 27, 2008 – “The lion has made a giant leap forward,” said Loewe AG’s CEO Dr. Rainer Hecker when describing the company’s performance at the financial press conference in Munich.

Because 2007 was a highly successful year, the company’s employees will receive a EUR 1.5 million extraordinary incentive bonus this April. At the Annual Shareholders’ Meeting in June, a dividend in the amount of EUR 0.27 per share will be proposed for 2007 – the first such payment since 2003. “Our products are highly attractive and receive many prizes and best in test awards. All this is the result of our value-based management with its focus on the interests of employees, shareholders, customers, and the public. We believe that this is the only way for the company to achieve sustainable growth.”

In the recently ended financial year (January 1 to December 31, 2007), the Loewe Group improved its earnings before interest and taxes (EBIT) by a significant 60 percent to EUR 21.1 million. In the same period, sales rose 9 percent to EUR 372.5 million.

“Loewe performed exceptionally well last year and is poised to continue expanding its leadership in the market for home entertainment systems in Europe,” Hecker added.

The robust growth in earnings is primarily a result of the strong demand for attractive, customizable Loewe Premium Systems, the high degree of price stability, and the continued improvement of the product range structure. “But the stable value of the brand is far more important to us than increasing our sales and market share,” Dr. Hecker emphasized.

The newly launched large-screen LCD TVs were especially successful and led to a doubling of sales in the category of sets with screens 37 inches and larger in 2007. New audio components have significantly enhanced the features of sound systems in Loewe televisions. This is also reflected in the growth in market share in 2007. In Germany, for example, it rose from less than one percent to more than seven percent.

“The first few months of 2008 have fully met our expectations to date,” CFO Oliver Seidl said. “As forecast, our sales have been slightly higher than in the first quarter in 2007. We anticipate that EBIT will appreciably surpass the robust value of the prior year.” From a seasonal perspective, Seidl pointed out that growth at Loewe will be stronger in the first half of 2008 due to large-scale sports events like the European Football Championship in Austria and Switzerland.

According to Seidl, Loewe will continue to take advantage of the opportunities of the market in the premium segment through the value-based marketing of attractive home cinema solutions and new multimedia products for intelligent networking. In addition, the company will focus on systematically expanding distribution in Germany and internationally from a qualitative and quantitative perspective.

The emphasis is on core markets in Europe. Loewe will continue to enhance its retail presence by opening flagship galleries in selected international cities. In addition, Loewe will intensify its international project business in segments such as hotel TVs.

“It will be another year of investments for Loewe in 2008: we will invest in the expansion of our premium POS network with shop-in-shop systems, in a state-of­the-art production line, in a comprehensive system for customer relationship management (CRM), and in a competence campaign for our employees and retail partners,” said Dr. Hecker.

“We are confident that the current year will be a success,” he said. “We expect sales growth of 7 percent to approximately EUR 400 million and a 14 percent improvement of earnings before interest and taxes (EBIT) to approximately EUR 24 million,” Oliver Seidl added.