▲ CONTENTS / Annual Report 2006 Page 2 -- Foreword Page 16 -- Report by the Supervisory Board Page 20 -- Corporate strategy Page 23 -- Investor relations Page 29 -- Contents / financial information Page 30 -- Management report Page 50 -- Financial information / Group Page 80 -- AG balance sheet Page 81 -- AG income statement Page 82 -- Terminology Page 85 -- Summary of equity interests KEY FIGURES GROUP 01.01.-31.12.2005 01.01.-31.12.2006 € million € million Sales 213.8 270.2 of which in-house productions 176.7 243.2 of which third-party productions 37.1 27.0 EBITDA 81.4 112.4 Gross profit 31.3 34.6 Operating Result 10.9 15.2 Result attributable to the shareholders of the parent company 3.9 8.3 Investments in film assets 119.4 75.8 Depreciation of film assets 67.9 96.4 31.12.2005 31.12.2006 Film assets 195.1 174.5 Equity 60.7 70.2 Balance sheet total 391.2 387.9 Employees (number) 237 232 Earnings per share in € (undiluted) 0.31 0.65 ▲ KEY FIGURES ▲ FOREWORD by the Management Board of Constantin Film AG Dear shareholders, was a good year for German films too. For the first time theatre admissions in Asia. Chinese box offices, for dear friends of Constantin Film AG, in 20 years, German films topped the theatrical charts example, increased their re ceipts by 30 per cent over for 10 weeks in a row in the autumn of 2006. 2005. (Source: Blickpunkt:Film) The situation is improving again! Only a year ago, German theatres were in the throes of a major crisis. In addition to Perfume – The Story of a Murderer, Constantin Film’s fiscal year in 2006 Theatrical sales were down 16.6 per cent, the market Das Leben der Anderen and Hui Buh – Das Developments at Constantin Film were very positive in share of by domestic theatrical films dropped to Schlossgespenst, the World Cup documentary 2006. This was attributable to a very large extent to the 17.1 per cent. In addition to a poor range of films and a Deutschland. Ein Sommermärchen, the sequel excellent results achieved in the TV service production, change in consumers’ leisure patterns in Germany, 7 Zwerge – Der Wald ist nicht genug and the surprise licence trading and theatrical distribution operations. theatres were being hit by the success of DVDs as well hit Wer früher stirbt, ist länger tot made sure the Thanks primarily to the very good performance of the as film piracy. German market share reached 25.8 per cent. films Perfume – The Story of a Murderer, Hui Buh – Das Schlossgespenst, Atomised and Die Wilden Business at theatre box offices gained momentum Admission and sales figures increased again at inter - Hühner, Constantin Film is one of the driving forces again in 2006, however, in spite of the World Cup and national level too. US box office receipts recovered behind the current success of German films at excellent summer weather. from the previous year by recording growth of almost theatrical box offices. The strategic decision taken with 5 per cent. Box office receipts for the year in Australia effect from January 1, 2004 to broaden the basis of the With total annual figures of 136.7 million admissions were the second-best ever with an increase of 6 per core business by adding home entertainment operat - and sales of € 814.4 million, German theatre owners cent over the previous year. This trend was apparent in ions proved to be correct last year. In spite of a slight and distributors were able to breathe a sigh of relief most of the key European markets too. Domestic films decline in the overall home entertainment market, we again compared with 2005 (127.3 million admissions, had a sensational year in France with a market share of succeeded in producing very positive results here too. sales of € 745.0 million). The industry is, on the other 45 per cent. The number of admissions rose by 7 per hand, still far behind the record year of 2004 in spite of cent over 2005 to 187 million. Swiss theatres were able This outstanding performance was made possible not this encouraging development. (All the figures to report an impressive record year with 10 per cent only by Constantin Film’s very attractive distribution provided by FFA). higher box office receipts than the previous year. Italy programme and its ambitious and successful develop - experienced sales that were up 3 per cent. Great Britain ment and production operations but also and in 2006 was a year of great variety. German theatres roughly matched the performance in the previous year, particular by the sustained integration of all areas of benefitted on the one hand from the American film when box office receipts bucked the general trend and the company and its systematic expansion into an studios, which supplied such box office hits as Ice Age grew by 1 per cent. Spain was one of the few European integrated media group. Maintenance of this develop - – The Meltdown (8.7 million admissions) and Pirates countries with a downward trend (5 per cent fewer box ment since the 2004 fiscal year is confirmation of our of the Caribbean 2 (7.1 million admissions), while it office admissions). 2006 was a breakthrough year for business model and our strategic alignment. AR 2006 Page 2 Our theatrical films in 2006 Patrick Süskind’s bestselling novel Perfume at German Theatrical exploitation fell short of our expectations in Constantin Film released a total of 17 films to German theatres by the end of 2006. the USA and England. theatres last year: 9 of them were in-house and co- productions, while 8 were licensed films; German films A fantastic start was made immediately on September In addition to producing excellent results at the box accounted for 41 per cent of the theatrical distribution 14, 2006: the long-awaited, controversial Tom Tykwer office, Perfume has won a number of awards. programme. A market share of 9.8 per cent was film went straight to the top of the German theatrical Following the BAMBI 2006 for the best film of the year, reached with 12.9 million box office admissions. charts on its release weekend, accounting for every Tom Tykwer received the Bavarian Film Prize as best Constantin Film was therefore once again the most second ticket bought at theatres in Germany. With director and Uli Harnisch for the best set in mid- successful independent German distributor after the 1.04 million admissions, Perfume was the first German January. Karoline Herfurth and Ben Whishaw were also major US studios 20th Century Fox, UIP, Buena Vista film and only the fourth film at all to exceed box office presented a DIVA for their acting performances in and Sony Pictures and before Warner Bros. Every third admissions of one million on its very first weekend last Perfume. ticket that was bought at theatres last year for a year. Perfume remained the unchallenged leader of the German film was for a film distributed by Constantin German theatrical charts over the following three Our family entertainment production Hui Buh – Film. (Source: EDI Nielsen) weeks. There was no sign of the theatrical exploitation Das Schlossgespenst (release date: July 20, 2006) of Perfume in Germany ending at the beginning of reached 5th place in the list of the most successful An overall total of 487 films were released to German 2007 either. Due to the strong demand, 90 theatres German films in 2006, attracting enthusiastic theatres in 2006 – a record number that is far too high. included the film of the novel in their programmes again audiences totalling more than 2 million in Germany. It is very apparent that German theatrical audiences in February 2007. This film at long last brought the adventures of the are concentrating on films that have either event charming but clumsy ghost, who has been causing potential or a definite marketing message or appeal to The film has performed well at the international level havoc for more than 30 years now with sales of over clearly defined target groups right from the start. too: with global receipts so far of USD 122.1 million, 20 million records, cassettes and books, to the big Family entertainment productions but also individual Perfume is one of the biggest global successes by screen. In Hui Buh – Das Schlossgespenst, the ghost art house productions are relevant categories here. We German films in recent years. In Spain, for example, brought to life by audience favourite Michael Bully took account of this trend in the preparation of our Perfume entered the theatrical charts in second place Herbig (Manitou’s Shoe) and the brave caretaker distribution programme again in 2006. on its first weekend and reached total box office played by Hans Clarin in his final role are helped by receipts of almost USD 10.0 million. Russia / CIS Christoph Maria Herbst, Ellenie Salvo González, Heike Constantin Film supplied the most successful German reported excellent box office receipts of USD 9.3 Makatsch, Nick Brimble, Rick Kavanian, Wolfgang Völz production of the year with the Bernd Eichinger million, while the film performed extremely well in Hong and many others as they experience hair-raising production Perfume – The Story of a Murderer. Kong too, where receipts on the first weekend were adventures. The screenplay for the film was developed Audiences of 5.5 million wanted to see the film of more than USD 150,000 with only 20 copies released. by author Dirk Ahner together with the director AR 2006 Page 3 ▲ FOREWORD by the Management Board of Constantin Film AG Sebastian Niemann (Das Jesus Video).