05.02.2004 – 08:33

JoWooD Productions Software AG

euro adhoc: JoWooD Productions Software AG
JoWooD announces preliminary annual result for 2003 (E)

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

•	Group result increased to over EUR 3.6 million
•	Restructuring successfully completed - sustainable strategic
repositioning achieved

JoWooD Productions Software AG, a company quoted on the Vienna Stock
Exchange has completed it’s turnaround following difficulties during
the business year 2002.  The positive result for 2003 confirms the
company’s successful restructuring and repositioning

The preliminary EBIT increased to EUR 7 million (2002: EUR -42.8
million). The preliminary group result after minorities increased to
EUR 3.7 million (2002: EUR -28.6 million).  JoWooD has, thus, managed
to achieve a sustainable profitability increase through a successful
strategic and structural reorganization of the company.

The decrease in preliminary sales from EUR 43.5 million in 2002 to
EUR 23 million in 2003 is in line with the company’s new business
model.  Last year’s sales included trading goods from third party
suppliers as well as revenues from distribution.  In the course of
the strategic repositioning JoWooD refocused on it’s core
competencies, development and publishing of top titles.  The
distribution function was outsourced to external distribution
partners.  In 2002, the business areas development and publishing
contributed approx. EUR 16 million to group sales.  In the relevant
business area, JoWooD achieved a revenue increase of nearly 30
percent in 2003.

JoWooD has successfully re-established itself in the financial market
during 2003 and is considered the first company to have managed a
return to the Prime Market segment of the Vienna Stock Exchange.

"This year’s results confirm the viability of our new strategy - also
with respect to our much larger industry peers.  The primary
objective for the business year 2004 is to reinforce JoWooD’s
strategic position and increase international sales of our products. 
In 2004 the company will also focus on expanding it’s console
business.  We are very proud of our result for 2003.  It will serve
as a solid foundation for future growth", said CFO, Michael Pistauer.

Financials:

The percentage of foreign sales has risen significantly in comparison
to previous years.  In 2002 the percentages of foreign sales and
foreign sales excluding German speaking countries amounted to 55
percent and 27 percent, respectively.  In 2003 these percentages
increased to 74 percent and 40 percent, respectively.  A further
internationalization of JoWooD’s business is on the agenda for 2004.

JoWooD managed to establish and build several successful brands in
2003, in particular SpellForce and the Gothic Series.  The
continuation of this brand strategy will be a further success factor
for 2004 and 2005.  In addition to these company owned brands JoWooD
will bolster its portfolio by games based on licensed film- and TV
IPs such as Stargate SG1 in 2005 and another title based on a
successful film IP scheduled for release in 2004 which is to be
officially announced within the coming weeks.

JoWooD’s accounting principles are significantly more conservative
than those of it’s industry peers: Titles are depreciated within one
year, minimum guarantee advance payments are not booked as
profit-related advances, no "Percentage of Completion" is booked for
titles under development.  License payments for sales above
contractual minimum guaranties during November and December 2003 will
be booked in 2004.

The JoWooD Group’s balance sheet total was reduced to approx. EUR 48
million in 2003.  This corresponds to a reduction of approx. EUR 4
million compared to the previous year.  The balance sheet’s asset
side holds in excess of EUR 10 million cash position (2002: EUR 1
million).  The equity ratio before minority interests is approx. 83
percent (2002: approx. 27 percent).

The Bank Agreement II, which includes a debt waiver of EUR 6.5
million before taxes, was successfully executed in 2003.  The
company’s debt was reduced to approx. EUR 9 million (2002: approx.
EUR 19 million) -EUR 8 million thereof being long term debt.  Short
term liabilities were reduced from EUR 34.3 million 2002 to EUR 8.1
million  Long term liabilities are down at EUR 8.2 million from EUR
12.3 million in the previous year.  The corresponding total reduction
of liabilities amounts to approx. EUR 30 million

A debt equity swap scheduled for 2003 which was not recorded in the
commercial register within the reporting period will be booked in
2004.  This swap will lead to an equity increase of EUR 2 million
with a similar decrease in debt.

A partial breach of the 2002 Bank Agreement by some of the signatory
banks led to a substantial liquidity shortage and to profit problems
in 2003.  Total restructuring and one-time expenses amounted to EUR
13.7 million These expenses could be compensated through successful
negotiations.  However, lost profits caused, for example by emergency
sales of titles and assets, could not be compensated.  The
corresponding damage amounts to several million EUR.

Similarly, accounted interest effects could not be compensated. 
Interest and currency expenses amounted to approx EUR 1.4 million and
were strongly influenced by the present weakness of the US Dollar.

Because of the weak US Dollar lost profits of approx. EUR 1 million
and currency expenses of EUR 364 thousand were incurred.  A
significant improvement of the result from financing operations is
expected for 2004 as company debt has been reduced significantly and
liquid funds have been increased.

The reported tax load of approx. EUR 1.9 million is almost completely
non-cash.

The final group result for 2003 will be announced on February 25,
2004.

end of announcement        euro adhoc 05.02.2004

Further inquiry note:

JoWooD Productions Software AG
Dr. Michael Pistauer, Vorstand.
Karin Kraberger, Investor Relations
Tel.: +43 (0)3614 2966 1015
mailo:investor@jowood.com
http://www.jowood.com

Branche: Software
ISIN: AT0000747357
WKN: 074735
Index: ATX Prime, ViDX, WBI
Börsen: Wiener Börse AG / official dealing
Berliner Wertpapierbörse / free trade
Bayerische Börse / free trade
Baden-Württembergische Wertpapierbörse / free trade
Frankfurter Wertpapierbörse / free trade