A.S. Création Tapeten AG: Sale of the 50% stake in OOO A.S. & Palitra

In 2008, A.S. Création Tapeten AG and OOO Kof Palitra ("Kof Palitra"), the leading Russian wallpaper manufacturer, established a Russian joint venture under the name of OOO A.S. & Palitra, Dzershinsk/Russia ("A.S. & Palitra"), in which each of the partners holds 50% of the shares. Since 2012, A.S. & Palitra has produced high-quality wallpapers for Eastern Europe, in particular for the Russian market. Under an agreement signed today, A.S. Création Tapeten AG will sell its 50% stake in A.S. & Palitra to the co-shareholder's group of companies.

As the conditions in the Russian wallpaper market changed over the past few years, the non-EU Eastern European markets have become far less important export markets for A.S. Création's Group revenues. A.S. & Palitra's rising sales of locally produced wallpapers are not reflected in A.S. Création's Group revenues, as the joint venture is not fully included in the consolidated financial statements of A.S. Création because of the shareholder structure. Given that a change in the shareholder structure of the joint venture or an expanded cooperation do not appear to be feasible in the future, the Managing Board of A.S. Création Tapeten AG has decided, after consultation with Kof Palitra and the latter's majority shareholder, Lins Wallpaper Limited, London/UK ("Lins Wallpaper"), to withdraw from the joint venture. A.S. Création will continue to have a presence in Eastern Europe through the production facility in Minsk taken into operation in 2018 and the distribution company in Moscow. Both companies are wholly owned by the A.S. Création Group.

According to the contract signed today, Lins Wallpaper will acquire the 50% stake in A.S. & Palitra from A.S. Création Tapeten AG and repay the shareholder loans until December 31, 2019. The transaction is worth a low double-digit million euro amount and will lead to a positive one-time effect in A.S. Création's consolidated financial result for the 2019 fiscal year. This means that the transaction will have no impact on the published EBIT forecast for the fiscal year 2019, according to which A.S. Création will generate earnings before interest and taxes of between EUR 1 million and EUR 2 million. Consolidated earnings after taxes for the fiscal year 2019, however, will be higher than expected as a result of the transaction and amount to between EUR 10.0 million and EUR 11.0 million. Consolidated earnings after taxes - excl. one-time effects - had previously been expected to come in at between EUR 1.5 million and EUR 2.5 million.

Gummersbach, April 2, 2019

A.S. Création Tapeten AG

The Managing Board

 

Contact:
Maik Krämer
Director of Finance and Controlling
Südstr. 47
D-51645 Gummersbach
Phone +49-2261-542 387
Fax +49-2261-542 304
E-Mail: m.kraemer@as-creation.de