Corporate news

MAGIX publishes preliminary six-month figures

Corporate News

•    Revenue shift due to adjustment of release cycle
•    Revenue still expected to be at previous year's level

Berlin, 30 April 2008 – This Wednesday, MAGIX AG (ISIN DE0007220782) presented its preliminary and unaudited figures for the first six months of the 2007/2008 financial year.

Between October 2007 and December 2008 the company achieved revenues of EUR 16.3 million, which corresponds to a drop of 8 percent compared to last year. In the second quarter revenues were at EUR 7 million and thereby 11 percent below the same period of the previous year.

In addition to the reorganization of the retail business in the US the development of revenue is attributable to the group's adjustments of the release cycle in particular. For the first time the products Movie Edit Pro and Photos on CD & DVD were not published in a bi-annual cycle on the German market so that revenues comparable to the previous year are missing here. At the same time this allowed for earlier publication of these versions and the introduction of new products in the fourth quarter. Internationally the products can therefore be positioned better for the Christmas sales in particular.

Despite the fact that direct sales of MAGIX were affected by the missing bi-annual versions it was possible to generate a growth of 15 percent in the first quarter. The Portal business, which includes revenues with online partners, grew by 11 percent over the first six months. The number of registered users rose to 7.84 million.

The gross margin is subject to slight fluctuation due to the continuously changing product mix. In the second quarter it was 89.1 percent, thus 1.3 percent above the previous year, while it dropped slightly by 0.3 percent to 86.8 percent in the first six months. In comparison to the last financial year the operative costs were reduced by 10 percent in the second quarter. In the first six months they amounted to EUR 10.7 million, which corresponds to a drop by 11 percent. This is mainly attributable to a reduction of marketing costs.

The cash flow continued to be positive with EUR 2 million and the equity ratio remained constant at approx. 80 percent.

In the second quarter the EBIT were negative at EUR 0.2 million. EBIT of EUR 1.7 million were generated during the first six months. In financial year 2006/2007 the EBIT were at EUR 1.9 million. In contrast the EBITDA increased by 4% to EUR 3.4 million compared to the previous year.

Due to adjustments in the release cycle additional products will be released on the market in the second six months as compared to the past financial year. The Management Board therefore expects the declining revenues of the second quarter to be balanced and maintains its forecast of reaching revenues of the previous year in the financial year 2007/2008. The EBIT forecast of EUR 2 million is not at risk, despite the fact that marketing measures for the Mufin project in the fourth quarter will influence the EBIT.

The six-month report for the financial year 2007/2008 will be published on 30 May 2008.