EANS-News: German Pellets has significantly extended market presence in Central Europe

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annual report

Subtitle: Group annual accounts 2011: turnover and earnings increased

Wismar/Germany (euro adhoc) - The German Pellets Group has concluded
its 2011 business year with a clear increase in turnover and profit.
In Europe's pellet market, characterized by growth, the group of
companies has expanded its market position. A key contributing factor
in this was the takeover of FireStixx Holzenergie GmbH, Vilsbiburg.

In the 2011 business year, the total operating performance of the
German Pellets Group rose to 292.9 million Euro, compared to 165.4
million Euro in 2010. The company's EBITDA rose from 24.9 million
Euro in 2010 to 29.6 million Euro in the last business year.

A key determining factor in the 2011 business year was the
integration of the FireStixx group of companies into the German
Pellets organisation.

2011: the first bond, the first US site, "PowerPlus" … Apart from the
takeover of Firestixx, German Pellet Group's business year 2011 was
also characterized by its first bond issue, for the purpose of
opening up new production sites, as well as extending and
rationalising existing sites. German Pellets Group's productivity was
further enhanced by this. The company addressed the global increase
in demand for wooden pellets by building its pellet production
facility in the USA. From 2013, in Texas the group of companies will
produce a half million tonnes of wooden pellets each year.

The Group's brands - German Pellets, FireStixx and German Horse
Pellets - were further established in 2011, thanks to targeted
marketing measures and the use of new dealers. The proportion of
deliveries into the higher-priced private-customer segment has
further increased as a result. In introducing the innovative product
refinement process "Power Plus", German Pellets has attained a
further competitive advantage, thereby also strengthening its ties
with its partner dealers. German Pellets has also significantly
intensified its level of business with the distributive trade. Above
all, it is industrial pellets for large producers of electricity and
heating that are traded throughout Europe by German Pellets. In this
segment, demand has shown significant growth due to increasing energy
prices and politically favourable framework conditions, with German
Pellets' competence making it a trading partner much in demand. The
group of companies has also further developed its storage sites in
Europe. 2012: Good growth prospects in the European pellet market
This current business year, not least because of its market presence,
the German Pellets Group's expectation is that business will continue
to develop positively. In view of rising prices for fossil-based
energy sources and favourable framework conditions established by the
State, the projection is one of robust market growth worldwide, in
which German Pellets continues to extend its market share in Europe,
with its international orientation and the associated export
opportunities. Current market studies see the largest pellet market
worldwide evolving in the United Kingdom. In July, Britain's energy
ministry significantly improved the framework conditions for
producing electricity fuelled by wooden pellets. Following this,
energy companies and dealers in raw materials are trying to secure
large quantities on a long-term basis. In the end-user sector also,
in view of clear cost advantages favouring pellets (up to 50 per cent
cheaper than oil and gas), expectations throughout Europe point to
increasing sales of pellets. Experts forecast that pellet consumption
in Europe will almost treble by 2020, approaching 35 million tonnes
(Pöyry Study 2011).

In Germany itself, around 300,000 pellet-based central heating units
and pellet-burning stoves could be installed by the end of the year,
an increase of 50,000. In the medium-sized customer sector, supplying
local-heat, district-heat and process-heat networks, demand has more
than doubled, coming from industry, municipalities, the domestic
market, the health sector and the distributive trade.

Likewise, on the Austrian market there is a discernible trend towards
facilities with higher output and correspondingly high demand for
pellets. This year, sales of pellet boilers in Austria increased
between 20 per cent (boilers up to 30 kW) to 38 per cent (boilers of
30 kW and higher).

Regarding sales of its animal hygiene products, the company
subsidiary German Horse Pellets is benefiting from the latest
innovations in production capacity and packaging, permitting various
lot sizes to be offered. High levels of precipitation and also
unfavourable situations regarding raw materials for alternative
products are causing an increase in demand for animal litter close to
nature.

In terms of heating from renewable energies, Germany is still a
developing country. The recently-discussed disposal premium for the
exchange of old oil-based and gas-based heating facilities may prove
helpful. The intention is for the subsidy favouring renewable heating
to be covered by an apportioned charge on fossil-based energies.

The complete Group report can be viewed on the Internet at
www.german-pellets.de/en, under "Investor Relations".

About German Pellets German Pellets GmbH was founded in 2005 in
Wismar (Mecklenburg-Vorpommern) and has developed into the leading
producer of wood pellets in Germany and Europe. German Pellets
produces wooden pellets at twelve sites in Germany and Austria, as
well as products for animal hygiene.

Further inquiry note:
Claudia Röhr
Tel.: +49 3841 30306412
E-Mail: claudia.roehr@german-pellets.de

end of announcement euro adhoc
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company: German Pellets GmbH
Am Torney 2a
D-23970 Wismar
phone: +49 (0) 3841 30 30 6 0
FAX: +49 (0) 3841 - 30 30 6 91 00
WWW: http://www.german-pellets.de
sector: Energy
ISIN: DE000A1H3J67
indexes:
stockmarkets: free trade/Bondm: Stuttgart, Open Market: Frankfurt
language: English