Business Trends 2007/2008

Ski Slope Vehicle Market
The whole global ski slope vehicle market fell by around 20 % in the 2007/08 winter season. Fluctuations in market volume are characteristic of the ski slope vehicle market, because investments by cable car operators are heavily dependent on the trends in the previous year’s winter season.
The essential sales markets for ski slope vehicles overall are North America, Austria, France, Italy, Switzerland and Scandinavia. The decline was seen in all major European sales territories. In North America, sales volumes fell to a similar extent. Only in Russia were sales volumes for ski slope vehicles significantly higher than the previous year’s season.

Sales Trends
In contrast to new vehicle sales, the sales of replacement parts and maintenance services rose by 12 % over the previous year’s season. With a share of around a quarter of the total sales, this sector made a considerable contribution to the company’s sales and profit trends.

The decline in used vehicle sales of 16 % to € 9.5 million reflects a trend. It is getting ever harder to sell the high priced used vehicles counted in these figures. Furthermore, sales are largely dependent on the prevailing snow conditions at lower altitudes.

Kässbohrer Geländefahrzeug AG is not only represented on the ski slopes, but also the beaches of the world. Sales from our BeachTech machines also saw a slight decline from € 4.3 million to € 4.1 million with sales of almost the same level as the previous year. Our BeachTech machines clean beaches primarily in Spain, France, Italy and the USA. However, last year showed that the US market is highly competitive, although it still offers potential for growth.

After deduction of operational expenses, the result was an EBIT of € 15.5 million. The EBIT for the previous year 2006/07 was significantly higher at € 18.2 million.

The group’s annual net profits were € 8.9 million compared to € 14.9 million in the previous year.

Competition
Kässbohrer Geländefahrzeug AG took over a Finnish competitor producing ski-trail groomers in the 2006/07 financial year. There was a further takeover, in the 2007/08 financial year, of another Finnish competitor by Kässbohrer Geländefahrzeug AG. Hydrolink Oy Ab had built vehicles for ski-trail and piste preparation for 40 years under the name Formatic. The Scandinavian market is a significant market with a share of around 13 % of the overall European market. The new Formatic 350 vehicle will be built at the Finnish site and sold and serviced through the existing Kässbohrer sales and service organisation. A two brand strategy will be followed with this concept.

Outlook
In the context of the current 2008/09 winter season, Kässbohrer Geländefahrzeug AG has recorded the largest number of orders received in its history. Given the worldwide mood of recession and the countless negative company messages, trends in the ski sector are pleasantly positive. The 2008/09 winter season has started well. There was early snowfall, which is a very important basis for the rest of the winter season. Only a few ski resorts are reporting reduced bookings, especially in Switzerland. However, the best winter and weather conditions are prevailing on the whole, which tempted many skiers and snowboarders to the ski resorts, even over the Christmas holidays. How the rest of the winter season will develop remains to be seen, because if it continues in this positive vein, it will have a favourable influence on the maintenance services and replacement parts business. This proportion of sales makes a significant contribution to the overall profits for Kässbohrer Geländefahrzeug AG.

Other
Kässbohrer Geländefahrzeug AG was erroneously included in the reporting of difficult developments in the activities of its major shareholder. The main shareholder in Kässbohrer Geländefahrzeug AG with a stake of 89 % is LuMe Vermögensverwaltung GmbH, Ulm, which is 100 % owned by Mr Ludwig Merckle. A management contract and a profit and loss transfer agreement have been in place with LuMe since 2007.

Kässbohrer Geländefahrzeug AG has always financed its own seasonal financing requirements with working capital credit from its own banks – irrespective of its ownership structure. The lines of credit provided for this purpose by Kässbohrer’s banks were expressly confirmed by the latter. Kässbohrer Geländefahrzeug AG is thus financially independent of its parent company.

General Meeting
The ordinary general meeting will take place on 24th March 2009 in Laupheim.