Balance sheet report for fiscal 2006

. Consolidated net income up by Euro 1.1 million
. Competencies: Due Diligence, Real-Estate Asset Management, Energy Management
. Growth markets: Eastern Europe and Russia
. Running a tight ship
. Over 50 new hires


Consolidated net income up by Euro 1.1 million
Drees & Sommer looks back on a successful year in fiscal 2006. As a result of the introduction of Lean Management, the decline in sales was overcompensated by a reduction of Euro 4 million in expenses. Group sales for Drees & Sommer AG in 2006 totaled Euro 109.7 million (prior year Euro 115 million). Results compared to last year were significantly improved, particularly for domestic and European subsidiaries: Domestic offices made a contribution or 49.8 percent to the overall result, Expert Teams of 35.2 percent and international subsidiaries of 15.0 percent. Expenses totaled Euro 100.6 million. The financial result was Euro 0.5 million compared to Euro -0.3 million in the prior year. Result from ordinary activities totaled Euro 9.5 million, an improvement of Euro 1.4 million over prior year. Consolidated net income increased by Euro 1.1 million over prior year to # 9.5 million.

Competencies: Due Diligence, Real-Estate Asset Management, Energy Management
As the result of the growing number property transactions, Drees & Sommer experienced increased demand for qualified technical due diligence. "Last year we undertook sale and purchase due diligence for a transaction volume of some Euro 10 billion. The investment boom is expected to continue in 2007. We are expecting to achieve an increase of 50 percent in due diligence contract volume. The radical change in ownership structure in real estate demands active management of properties and portfolios in order to utilize value-add potential. This is leading to an increase in the range of services in the area of technical real-estate asset management to reduce cost and increase returns. These services go far beyond conventional property management. We view investment and renovations from the point of view of onselling. The focus is on technical assessment in the areas of facility management, life-cycle costs and potential analysis as well as the entire range of operational analyses to redevelopment and exit strategies," is how Prof. Dr. Hans Sommer, Chairman of the Executive Board of Drees & Sommer AG summarizes the consolidation of services.

Property owners and operators are attaching increasingly attaching importance to energy efficiency. That means there is a future market for 'Green Buildings' - innovative and intelligent energy concepts that combine environmental protection with economy. We expect considerable growth in the areas of energy management for existing buildings and energy design for planning and construction," says Peter Tzeschlock, member of the Executive Board of the DS-Plan expert team.

Growth markets: Eastern Europe and Russia
Currently, the international focus is on the growth markets of eastern Europe and Russia, where returns are even higher. "Last year, a team of over 90 was involved in the construction of shopping centers, retail markets, business parks and logistics centers for new members of the European Union Bulgaria and Romania, and for Russia. International activities, particularly in Russia, are undergoing strong growth, which we also anticipate in Turkey. We are not only supporting German and international companies in their foreign activities, but increasingly meeting demand from local clients, supporting them with our local presence," say Ralf Schwiede, member of the Drees & Sommer Executive Board.

Running a tight ship
We laid the foundation for sustainable growth through optimization of our corporate structure in 2006. "The new structure results in a flexible, efficient company that avoids waste and delivers maximum value-add," said Chairman of the Executive Board, Prof. Dr. Hans Sommer. To optimize higher-level management, Drees & Sommer has been divided into Area North and Area South. The dividing line between the two areas is south of Frankfurt.
National borders area no longer relevant in this structure, allowing uncomplicated employee exchanges to improve cooperation betwen German and international offices. Also, in future the areas Development Management and Infrastructure will operate under one roof as Drees & Sommer Infra Consult and Development Management.
 
Over 50 new hires
Bucking the general trend, Drees & Sommer has invested in over 50 young employees. "We have always attached great importance to promoting young personnel. This secures us against a future lack of engineers. And we avoid the problem of finding qualified staff - experienced by many companies - with our own Continuing Training Academy where we train our young staff ourselves," says Andreas Blaschkowski, member of the Executive Board of Drees & Sommer.

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