Studio Babelsberg AG Reports Moderate Profits for 2011

04.05.2012

Stable business year with two international and several German film projects

Last year, several German and international filmmakers and movie stars came to shoot at Studio Babelsberg including: Tom Hanks and Halle Berry in Cloud Atlas, Jeremy Renner and Gemma Arterton in the 3D spectacle Hansel and Gretel: Witch Hunters, Iris Berben and David Kross in Anleitung zum Unglücklichsein, Alexandra Maria Lara and Matthias Schweighöfer in Deltev Buck’s Rubbeldiekatz, and Götz George and Michael "Bully” Herbig in Helmut Dietl’s Zettl, In spite of a loss warning announced in early November 2011, Studio Babelsberg Group was able to record profits again via revenue from stage rental and production services rendered in 2011, proving its reputation as a reliable production partner for German and international film producers.

With revenues totaling EUR 43.9M (EUR 57.5M previous year), Studio Babelsberg generated operative profits in the amount of EUR 535K (over EUR 422K for the previous year). Studio Babelsberg continues to be debt free and the corporation has no bank debts. Consequently, Studio Babelsberg shows a significant equity-to-asset ratio for the 2011 reporting period: 90% on a group level versus a 78% ratio on a corporate level.

Altogether the Studio acted as co-producer on four productions in 2011, and rendered production services for another seven productions. The costume, props and art department were involved in 70 film projects, in addition to several trade fares, exhibits and events that were not film-related. In the past fiscal year, the corporation benefited particularly from strong business for its subsidiaries: Art Department Studio Babelsberg GmbH, which provides decorations, stage and specialty construction for film and non-film related projects.

In 2011, Studio Babelsberg served as producer on commission and co-producer for US-major Paramount Pictures on the horror comedy feature Hansel and Gretel: Witch Hunters, produced entirely in 3D. Principal photography took place in elaborate sets on the studio lot from January to June of 2011. From September until the end of 2011, Cloud Atlas, the feature adaptation of David Mitchell’s bestselling novel, came onto the lot for on-stage photography. Cloud Atlas is directed by Tom Tykwer, Lana and Andy Wachowski. Studio Babelsberg provided the production services, stage-rental, set construction, props and set dressing for the X-Filme production.

Management expects the remainder of 2012 to be challenging. Despite several negotiations regarding international film projects, large-scale productions could not be acquired for the current year.

Dr. Carl Woebcken, CEO Studio Babelsberg AG: “We are happy that 2011 was a profitable year for us and that the Studio continues to attract renowned filmmakers to come and shoot in Babelsberg. We offer first-rate production facilities, a world-famous set construction department, internationally experienced film crews and great locations in the Berlin-Brandenburg capital region. Still, business has become tougher and the international incentive schemes have become more competitive. We are in worldwide competition with countries such as Canada, Australia, the U.K., Hungary and Czech Republic, who provide strong incentives particularly aimed at large-scale film productions. Despite intensive efforts and negotiations, we have lost several large productions to competitors in other countries. Consequently, our stages have not met their rental quotas, leading us to expect less revenue and profit. As of now, it remains unclear whether our prospects will become brighter for the remaining year. We are focusing all of our efforts on winning large-scale projects for the later months of 2012.”

To retain corporate liquidity, the board of supervisors approved management’s plans at their meeting on May 2nd 2012 to propose to the shareholders not to pay a dividend for fiscal year 2011.

Studio Babelsberg’s shareholders’ meeting is scheduled to take place in the second half of August at fx.Center Babelsberg, on the studio’s lot. The annual report 2011 will be available for download on the internet from mid June at www.studiobabelsberg.com