After-tax consolidated earnings from continued operations were € -2.6 million (2006: € -6.5 million). The net result for the period also improved significantly year-on-year, from € -12.7 million in 2006 to € -2.7 million in 2007. This includes net result from discontinued operations in the amount of € -0.1 million (previous year: € -6.1 million).

Consolidated sales in the 2007 financial year were € 110.5 million, a decline of 4.9% compared to 2006 (€ 116.1 million). There was a sharp upturn in revenues of the Zapf Creation Group during the year, reaching € 52.9 million in the especially important fourth quarter — an increase of 15.1% over the same quarter of the previous year.

The equity ratio of the Zapf Creation Group climbed to 12.5% at the close of the period presented (from 3.1% as of December 31, 2006) due to the successfully executed capital measures of the year 2007. Net liabilities declined substantially from € 53.3 million at the close of 2006 by € 37.4 million to € 16.0 million at the close of 2007. It fell by € 20.5 million, if the subordinated shareholder loans granted in 2007 in the amount of € 16.9 million (including interest accrued as of the reporting date) are taken into account.

As far as the 2008 financial year is concerned, the Management Board expects consolidated sales to turn around and rise again, consolidated EBIT to improve further, and consolidated earnings after taxes to return to the black.

Jens U. Keil, Chief Financial Officer of Zapf Creation AG: "All key figures of Zapf Creation AG moved in the right direction in 2007. Now that our financing is on a firm footing once again, we are confident that in 2008 consolidated sales will also turn around."

Thomas Pfau, member of the Management Board and Chief Marketing and Sales Officer of Zapf Creation AG: "The successful 2007 Christmas season, as well as the outcome of the Nuremberg Toy Fair at the beginning of this year, underscore that the Zapf brand has lost none of its attractiveness and that market response to our new products is excellent. We are confident that Zapf's worldwide market position will strengthen in 2008 thanks to our promising product pipeline and additional synergies from our strategic cooperation with MGA Entertainment."

Zapf Creation AG will publish its audited annual financial statements on March 31, 2008, and discuss them at both a financials press conference and an analysts' meeting.