Letter to shareholders for the first half of 2006

Essen, 29. August 2006

Dear Partners, dear Sir/Madam,

Our circle of shareholders has been substantially expanded: I would like to take this opportunity to warmly welcome all new GFKL shareholders who have come on board by way of the ABIT AG merger. The respective entry into the GFKL trade register was made on August 16. We will now promptly begin with the implementation of our long list of joint projects.

GFKL Group’s business developed positively in the first six months of the year. Overall, GFKL boosted its revenues from EUR 326.6 million to 452.8 million. We have therefore laid an excellent foundation to reach our target revenues of one billion EUR. GFKL’s first half year earnings were significantly above forecast and previous year. Before tax earnings totaled EUR 12.7 million (EUR 8.6 million); the group profit rose to EUR 10.7 million (EUR 5.1 million).

It must be emphasized that the upwards trend was equally evident across all sectors.

In the Credit segment we increased our new business by 34 percent (approximately EUR 80 million). Unfortunately, our interest margin fell sharply compared to the years prior; however, this was compensated by the boost in revenues, a significant reduction of relative costs and a decrease of credit losses, which allowed us to maintain the solid results of 2005. Attaining sector profits (EBT) of EUR 6.9 million, the Credit segment, in concert with our strategic orientation, therefore contributed approximately half of the group results. The international expansion of GFKL continues on plan; in the first half we were able to significantly increase our business activities in our existing foreign markets Holland and England. We also launched our Spanish operations. Utilizing the uniform brand name Universal Leasing an impressive 40 percent of our new business will be produced in European markets outside of Germany next year.

Our business activities in the Collection segment are also very clearly focused on growth. We will continually add to the organic revenue and earnings increases (revenues: +61 percent to EUR 19.2 million; before tax results: + 35 percent to EUR 3.9 million) through targeted corporate acquisitions; which will expediently expand our positioning in the market. In keeping with this goal, GFKL acquired Zyklop Inkasso Deutschland AG, a Krefeld-based company, as of July 1. The enterprise, whose customer roster consists primarily of medium-sized companies, manages the accounts of more than 8,000 clients and is among the top 20 of its industry. This sales and earnings driven company is precisely on par with the target parameters of our acquisition strategy.

As you know from previous publications, the new ABIT AG will continue its engagement in the market as a Software segment specialist. The progress this company’s business has made in the first half of the year has demonstrated that the demand for solutions that allow the efficient processing of unpaid receivables remains at a high level and has not slowed down at all. During the reporting period, the Software sector attained revenues totaling EUR 11.7 million (EUR 7.2 million). Before tax results improved significantly and rose from negative earnings of EUR 0.1 million to a profit of EUR 0.8 million.

In the Systems segment we recorded a series of important large scale orders. Among them was the delivery of 100,000 computers to a public sector client. In all, the division produced revenues of EUR 63.3 million (EUR 7.8 million; without ADA) and before tax results of EUR 2.3 million (EUR 1.3 million).

Given the equally positive development in all four business segments, I would like to reassert my assessments made based on the first three months: Our expectations at the onset of 2006 were moderate, however, the progression of the business so far, which brought us 40 percent more revenues and double the profits, allows us to look forward to an exceptionally positive overall result for 2006 – despite a potentially weaker second half of the year.

Yours faithfully,

Dr. Peter Jänsch
GFKL Financial Services AG

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