Ekornes

Ekornes generated operating revenues of NOK 1,886.5 million as at the third quarter of 2007, which corresponds to an increase of NOK 42.1 million (+2.3%) compared with 2006. 

As at 30.09.2007, the Group's consolidated profit amounted to NOK 328.0 million (17.4%) against NOK 367.9 million (19.9%) in 2006. This corresponds to a decrease of 10.8%.

Profit on ordinary activities before tax totalled NOK 306.3 million (16.2%) against NOK 359.3 mill. (19.5%) in 2006.

This corresponds to a decrease of 14.7%.

Net profit after tax amounted to NOK 209.8 million (NOK 246.2 million in 2006), which results in earnings per share of NOK 5.70 (NOK 6.69 in 2006).

Operating revenues in the third quarter of 2007 totalled NOK 616.6 million against NOK 585.2 million (+5.4%) in the corresponding period in 2006. The operating profit in the third quarter totalled NOK 102.8 million (16.7%) against NOK 123.7 million (21.1%) in the same period last year. Profit on ordinary activities before tax amounted to NOK 81.4 million (13.2%) against NOK 119.4 million (20.4%) in the third quarter of  2006.

The company's profit performance so far this year has been significantly affected by the strong Norwegian krone and the concurrently weak USD and JPY. In relation to the same period last year, lower exchange rates have resulted in a decrease in the operating profit of approximately NOK 33 million. Furthermore, there has been an increase of NOK 14 million in non-realised exchange loss connected with consolidation of balance sheet items. This results in a total decrease in the profit before tax of approximately NOK 47 million compared with the third quarter of 2006. Of this decrease, NOK 43 million stems from the third quarter of 2007.

The company's net profit margin has decreased so far this year as a result of increasing costs of materials and changes in product mix. Lower provisions for bonuses combine with improved results within the mattress area and in Japan, had a positive effect on the profit.

The profit margin achieved as at the third quarter indicates that the employees will qualify for bonus payments corresponding to 70 per cent of their monthly salary, in accordance with the previously established bonus scheme. As a result hereof, provisions for ordinary employee bonus amount to NOK 25.5 million as at the third quarter of the year against NOK 34.5 million as at the same time in 2006.

Provisions for the long-term incentive scheme for employees and management, which comes into effect if the company's average share price exceeds NOK 170.00 for a period of 20 successive trading days on the stock exchange, amount to NOK 12.0 million as at the third quarter of the year against NOK 16.5 million as at the same period last year. Total provisions for this incentive scheme (for 2005, 2006 and 2007 to date) amount to NOK 49.4 million as at 30.09.07. If the conditions for payment have still not been met at the end of 2008, all the provisions related to this scheme will be taken to income as at 31.12.2008.

Details of the two schemes are available at www.ekornes.no and in the company's annual report for 2006. The schemes are also described in a separate announcement to the Oslo Stock Exchange.

Provisions for bonuses totalling NOK 37.5 million have been made for the two bonus schemes as at the third quarter of 2007, compared with NOK 51.0 million as at the same time last year.

As at the third quarter of 2007, the company's order intake amounted to NOK 1,842 million, which is an increase of 5.6% compared with the same period last year. As at 30.09.07, the company had orders on hand worth NOK 192 million against NOK 171 million as at 30.09.06. 

The order intake in October was NOK 246 million, which is an increase of approximately 13% compared with the same period last year. The orders on hand amounted to NOK 261 million as at the end of October against NOK 230 million last year.

The consolidated financial statements for the third quarter of 2007 comprise Ekornes ASA and its subsidiaries. The annual report for 2006, which contains the consolidated financial statements for the Group as a whole and the financial statements for the parent company Ekornes ASA, may be obtained on request by contacting the company's head office or at the company's website: www.ekornes.no.

The consolidated financial statements for the third quarter of 2007 have been prepared in accordance with the statutory regulations for the Stock Exchange, the Oslo Stock Exchange's own rules and IAS 34 Interim Financial Reporting. The interim financial statements do not include all the information and disclosures that are required of a complete set of annual financial statements, and they should therefore be read in conjunction with the consolidated annual financial statements for 2006. 

The accounting policies and principles applied in these interim financial statements are the same as those applied in the consolidated financial statements for 2006 and are described therein. The consolidated financial statements for 2006 were prepared in accordance with the provisions of the Norwegian Accounting Act and international financial reporting standards as laid down by the EU.

Revenues, costs and balance sheet items for foreign enterprises are consolidated in accordance with IFRS. Revenues and costs are translated into NOK quarter for quarter, using the average exchange rate for the individual currency in the quarter in question. Balance sheet items are consolidated using exchange rates as at the closing balance sheet date.

Please also see the company's interim reports.

The furniture markets in general.

The furniture markets in Germany and the Netherlands developed negatively during the first half of the year, but there has been an improvement on these markets after the summer period. The market development has been stable in the other countries in Central Europe in 2007. The furniture market in the USA remains weak.

The market situation is better in Canada than in the USA. The Norwegian furniture market has continued to develop in a positive direction in 2007 compared with 2006. The other Nordic countries have had somewhat varying demand, with Denmark having the most favourable general market conditions. In Japan, the general economic conditions are slowly improving. However, the Japanese furniture market has generally seen a negative development during the year. 

The company has had a very heavy increase in sales and operating revenues in the third quarter compared with the same period last year, measured in local currency. This applies especially to Denmark (+50.3%), USA (+16%), Japan (+15.1%) and Southern Europe (+11.6%).

N-6222 Ikornnes, 12. november  2007/ 12 November 2007