euro adhoc: KarstadtQuelle AG / quarterly or semiannual financial statement / • Consolidated earnings (after minority interests) reaches EUR558.1 million - high positive extraordinary income from

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Disclosure announcement transmitted by euro adhoc.
The issuer is responsible for the content of this announcement.
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09.08.2006

Essen, Germany, 9 August 2006. After a successful financial
restructuring, KarstadtQuelle Group is concentrating on improving
operating performance and deploying its scope for growth. The group
has new strategic options available. With the settlement of a first
tranche of the property disposal, the Group received inflows
amounting to EUR2.7 billion on 3 July 2006. As a result, the (pro
forma) equity ratio improved to 16.7% (2.8% in the previous year).
The (pro forma) net financial liabilities are already down
considerably to EUR0.6 billion. By year-end, there should be an
equity ratio of approximately 20%. What is more, by year-end, there
should be no net financial liabilities. In the first six months,
adjusted Group sales totalled EUR6.47 billion (EUR6.76 billion in the
previous year), equivalent to a decline of 4.2%. Adjusted for the
sales effect from the catalogue pages no longer published in Mail
Order, sales in the first half-year of 2006 are only 1.2% under those
of the previous year and in the second quarter at the same level as
the previous year. In the first six months, KarstadtQuelle generated
consolidated earnings (after minority interests) of plus EUR558.1
million (minus EUR271.9 million in the previous year). Adjusted
EBITDA was minus EUR41.7 million (plus EUR19.4 million in the
previous year). Karstadt and Thomas Cook are on schedule and posted
an adjusted EBITDA well up on the level of the previous year.
However, Universal Mail Order in Germany considerably lagged the
figures of the previous year and those scheduled, both in terms of
sales and result. For this reason, additional restructuring measures
were introduced for Universal Mail Order Germany. They focus is on a
further, significant reduction of infrastructure costs in the Service
group. An extraordinary restructuring charge of approximately EUR200
million has been planned for this. In the second half of 2006, the
management expects an improvement in the development of group sales.
The Mail Order segment ought to reduce the negative deviation to
previous years shown in the first half of the year, but will not be
able to compensate for it. On the other hand, the Department Store
and Tourism segments should continue to develop above plan and well
above the previous year. At the current moment, the Management Board
does not consider it realistic to anticipate that these two segments
will compensate for the shortfall in Mail Order by overperforming
against the previous year in the second half of the year in order to
achieve the 20% increase of the adjusted Group EBITDA (without
consideration of the real estate transaction) which was forecast at
the beginning of the year. On current facts, the Management Board
anticipates that adjusted EBITDA (without consideration of the Real
Estate segment) will improve from the previous-year figure of EUR199
million (adjusted for the ABS effect in Mail Order of EUR50 million)
by approximately 10%. The reduction of the free cash flow relative to
plan will be partially offset by the expected above-plan reduction of
working capital.

Essen/Germany, August 9, 2006
The Management Board

end of announcement euro adhoc 09.08.2006 08:16:23
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ots Originaltext: Karstadt Warenhaus GmbH
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Detlef Neveling
Tel.: +49 (0)201 727 9816
E-Mail: detlef.neveling@karstadtquelle.com

Branche: Retail
ISIN: DE0006275001
WKN: 627500
Index: CDAX, Classic All Share, HDAX, MDAX, Midcap Market Index,
Prime All Share
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