Ekornes

Ekornes had gross operating revenues of 2,507.3 in 2006, compared with NOK 2,291.5 million in 2005. This is a rise NOK 215.8 million (9.4 per cent).

The Group made an operating profit of NOK 513.4 million (20.5 per cent) in 2006, compared with NOK 427.5 million (18.7 per cent) in 2005. This is an increase of 20.1 per cent.

Profit before tax totalled NOK 502,5 million (20.0 per cent), compared with NOK 441.5 million (19.3 per cent) in 2005, an increase of 13.8  per cent.

Profit after tax totalled NOK 343.7 million, compared with NOK 303.1 million in 2005. This gives earnings per share of NOK 9.33 in 2006, compared with NOK 8.23 in 2005.

Gross operating revenues in the fourth quarter 2006 totalled NOK 662.9 million, up 9.9 per cent from NOK 603.3 million in the corresponding period in 2005. Operating profit in the fourth quarter 2006 totalled NOK 145.5 million (21.9 per cent), compared with NOK 134.0 million (22.2 per cent) in the same period the year before. Profit before tax in the fourth quarter totalled NOK 143.3 million (21.6 per cent), compared with NOK 147.9 million (24.5 per cent) in the same period in 2005. A technical accaountancy effect due to foreign exchange rate differences used when consolidating the figures has given a negative effect in Q4 2006 of net NOK -17.7 million compared to Q4 2005.

The board of directors is proposing a dividend of NOK 7.50 per share for 2006, compared with NOK 7.50 for 2005. This gives a payout ratio of 80.4 per cent, compared with 91.1 per cent for 2005.

The profit margin achieved in 2006 means that employee's will receive a bonus corresponding to 100 per cent of their monthly salary. Consequently, provisions totalling NOK 44.5 million were made in 2006 to cover ordinary bonus payments to employees, compared NOK 33.6 million  in 2005.

Provisions associated with the long-term incentive scheme for management and employees, which comes into effect if the share price exceeds NOK 170 for 20 consecutive days of trading, totalled NOK 20.7 million in 2006, compared with 16.7 million the year before. As at 31 December 2006, provisions totalling NOK 37.4 million had been made in connection with this scheme. If the qualifying conditions have still not been met by the end of 2008, all such provisions as have been made in connection with this scheme will be taken to income as at 31 December 2008.

Further details regarding the two schemes can be found at www.ekornes.no and in the annual report for 2005. Please also refer to previous quarterly reports and notices sent to the Oslo Stock Exchange.

With respect to the two bonus schemes, provisions totalling NOK 65.2 million were charged to expenses in 2006, compared with NOK 50.3 million the year before.

Bonus provisions include employers' national insurance contributions.

In 2006 the company received orders worth  NOK 2,486 million, 2.4 per cent more than in 2005. As at 31 December 2006 the company had an order reserve of NOK 237 million, compared with NOK 258 million at the same point the year before. 

Order receipts in January 2007 totalled NOK 276 million, compared with NOK 282 million in January 2006.  At the end of January the company's order reserve totalled NOK 302 million, compared with NOK 338 million at the same point the year before.

The consolidated financial statements for 2006 cover Ekornes ASA and its subsidiaries. The 2005 annual report, which contains the financial statements for the Group as a whole and the parent company Ekornes ASA, can be obtained upon request from the company's head office, or from its website: www.ekornes.no. The annual report for the 2006 financial year will be published ahead of Ekornes ASA's annual general meeting, to be held on 10 May 2007.

The consolidated financial statements for 2006 have been prepared in accordance with the statutory regulations governing the Stock Exchange, the Oslo Stock Exchange's own rules and IAS 34 "Interim Reporting". The interim financial statements do not include all the information that is required of a complete set of year-end financial statements, and should therefore be read in conjunction with the consolidated annual financial statements for 2005.

The accounting principles used in the preparation of these interim accounts are the same as those applied to the consolidated financial statements for 2005 and are described therein. The consolidated financial statements for 2005 were prepared in accordance with the provisions of the Norwegian Accounting Act and international standards for financial reporting as laid down by the EU.

In 2006 there was strong demand for furniture in Germany and the other countries included in the Central Europe market area. The US furniture market declined somewhat, while the situation in Canada has improved. Developments in the UK furniture market were also weak, but showed signs of picking up towards the end of the year. Demand for furniture in Norway and Denmark was strong. The Japanese market expanded in 2006. Imports of reasonably priced products from China and low-cost countries to Norway, the EU and the USA continued to grow throughout 2006.

Ekornes did well in 2006. Following on from a record high order reserve at the start of the year, the company achieved strong growth in 2006. However, order receipts did not rise as strongly as the year before (up 2.4 per cent). The lower growth in order receipts is partly due to the restructuring of distribution in Norway and Sweden, which had a particularly negative impact on mattress sales. In light of this factor, order receipts were satisfactory.

N-6222 Ikornnes, 15. februar  2007/ 15 February 2007