Surteco Group SE

Quarterly Report • Aug 10, 2007

HALF-YEAR REPORT 2007

specialists for surface technologies

Q2

AKTIENGESELLSCHAFTAKTIENGESELLSCHAFT

1 January to 30 June

» OVERVIEW23

SURTECO GROUP

	Q 2	Q 1- 2
0 0 0s €	1 / 4 /- 3 0 / 6 / 2 0 0 6	1 / 4 /- 3 0 / 6 / 2 0 0 7	Va ia ion t r in %	1 / 1 /- 3 0 / 6 / 2 0 0 6	1 / 1 /- 3 0 / 6 / 2 0 0 7	Va ia ion t r in %
les Sa re ve nu es	9 9, 4 4 6	1 0 1, 4 7 8	2 +	2 0 5, 6 6 0	2 0 9, 1 1 0	2 +
f w h h ic o Ge rm an y - ig Fo re n -	3 0 3 9 5, 6 4, 4 0 7	3 4, 4 6 5 6 0 3 7, 1	-2 4 +	6 7 4, 4 7 1 3 1, 1 9 3	7 6, 1 0 7 3 3, 0 0 3 1	2 + 1 +
E B I T D A	1 6, 6 6 0	1 8, 2 7 7	1 0 +	3 6, 1 5 8	3 9, 1 9 5	8 +
E B I T	2, 9 1 1 4	1 3, 6 0 1	2 1 +	2 2 7, 1 5	2 9, 9 1 6	0 1 +
E B T	1 0, 5 3 6	1 1, 8 0 7	1 2 +	2 3, 6 1 4	2 6, 2 0 5	1 1 +
l da d n Co i inc te t nso e om e	6, 4 5 4	7, 1 2 5	1 0 +	1 4, 5 7 7	1 6, 0 9 7	1 0 +
inc ha in Ne t € om e p er s re	0. 8 5	0. 6 4	0 1 +	3 2 1.	1. 4 5	0 1 +
h ing Ca Ea s rn s	9, 1 2 3	1 1, 9 7 2	3 1 +	2 2, 3 7 6	2 5, 6 0 7	1 4 +
E B I T m in in % arg	1 2. 3	1 3. 4	9 +	1 3. 2	1 4. 3	8 +
f ina ia l l ia b i l it ies Ne 3 0 Ju t t nc a ne	1 3 9, 8 5 6	1 1 9, 9 2 9	-1 4	1 3 9, 8 5 6	1 1 9, 9 2 9	-1 4
( de b ) a Ge ing io 3 0 Ju in % t r t t ar a ne	9 2	6 6	-2 8	9 2	6 6	-2 8
ity ita l in % f ba lan he Eq t u ca p o ce s e l a 3 0 Ju to ta t ne	4 0. 7	4 6. 4	1 4 +	4 0. 7	4 6. 4	1 4 +
f e be loy 3 0 Nu t Ju m r o mp ee s a ne	2, 0 6 6	2, 0 6 2	-	2, 0 6 6	2, 0 6 2	-

4

» DEAR SHAREHOLDERS, PARTNERS AND FRIENDS OF OUR COMPANY5

STEADY ECONOMIC GROWTH CONTINUES

Favourable development in the macroeconomic environment continues worldwide, as well as in Europe and Germany. Although the US economy has "essentially been experiencing a flatter growth curve", the international economy continues to move forward dynamically, particularly in a number of emerging countries, such as India and China. As the global upswing gathers pace, individual factors such as high capacity utilization, increasing inflationary pressure, rising prices for raw materials, etc., will tend to exert a "damping effect" on the global economy. However, the composite leading indicator of the Organization for Economic Development (OECD) even indicates a slight improvement in growth perspectives on the basis of data for the month of May. The ifo global economic climate indicator remained unchanged at a high level in the second quarter of 2007 and is indicating a robust global economy in the second half of 2007.

After an increase of 2.7 % in 2006, growth in gross domestic product (GDP) for the euro-zone made a strong start at the beginning of 2007. According to estimates by Eurostat, GDP grew by 0.7 % in the 1st quarter of 2007 after seasonal adjustment, with the latest estimates indicating a rise compared with the quarterly comparison at 3.1 %. The model-based quarterly forecast of the EU Commission is projecting robust growth at an average of 0.6 % for the second and third quarters

The economic upturn is also continuing in Germany. In the 1st quarter of 2007, the price-adjusted gross domestic product was 0.5 % higher than the 4th quarter of 2006 and 3.3 % higher than

the comparable value for the equivalent year-earlier period. Economic growth was primarily driven by lively investment activity. The increase in value added tax put a significant brake on expenditure channelled into private consumption at the beginning of the year. The OECD has significantly increased its 2007 growth forecast for Germany over the whole of 2007 and puts the country in the lead of the G 7 States. The OECD is anticipating economic growth of 2.8 % for Germany (calendar adjusted: 2.9 %) in this year and 2.5 % (calendar adjusted: 2.2 %) next year. These figures are higher than the federal government forecast at 2.3 % and 2.4 %.

According to reports by GFK and the German Retail Association, the generally positive economic environment will only exert a limited effect on the furniture retail trade, because the framework conditions for private consumption in the current business year have undergone virtually no change. Furthermore, furniture manufacturers and building suppliers in Germany and other EU countries have derived virtually no benefit from the general upswing. SURTECO AG is assuming that the overall performance of the economy for the second half of 2007 will be weaker than in the first half of the year.

SURTECO AG INCREASES SALES AND INCOME

The SURTECO Group impressively reaffirmed its market position in the first half of 2007 with an increase in sales of 2 % and a rise of 10 % in consolidated net income. Plastic products continued their advance. The Strategic Business Unit Plastics increased sales after six months by 4 %, while coating products based on paper eased downwards by 2 %.

In June, SURTECO AG took over the line in skirtings and edging systems from the Gardinia Home Decor Group in an asset deal. Within the SURTECO Group, the acquired line of business has been incorporated within Döllken-Weimar GmbH located in Nohra, Thuringia (Strategic Business Unit Plastics). Sales of Gardinia skirting and edging systems in the German-speaking region will continue to be operated by the former Gardinia sales team under the management of Döllken-Weimar. In Eastern Europe, the Gardinia regional offices in the relevant countries will continue to be the responsible sales partners.

»SALES AND MARKETS

SALES IN THE PREVIOUS YEAR OUTPERFORMED

During the second quarter of 2007, Group sales continued to increase. They went up from € 99.4 million to € 101.5 million (+2 %). Although domestic sales fell just short of the equivalent year earlier value by € 0.5 million or 2 %, Group sales in foreign markets advanced significantly by € 2.6 million or 4 %.

For the first half of 2007, total sales amounted to € 209.1 million, exceeding the equivalent value for 2006 by 2 %. € 76.1 million (+2 %) of these sales were attributable to German customers while foreign markets generated € 133.0 million (+1 %). The proportion of foreign sales of the SURTECO Group was therefore stable at nearly 64 %.

STRATEGIC BUSINESS UNIT PLASTICS

The second quarter was extremely gratifying for the Strategic Business Unit (SBU) Plastics. The increase in sales compared with the equivalent year-earlier period amounted to 7 %. Growth of € 3.9 million to € 60.4 million was solely driven by successes in foreign markets, particularly in European countries outside Germany (+21 %). The Asian and Australian market also advanced – albeit at a significantly lower level. In North America, the ongoing weak economy posted a decline of € 1.3 million. Overall, foreign markets rose by 12 % to € 40.5 million in the second quarter of the current year, while business in Germany – solely caused by strategic rationalization of the DIY store business – gave way by 2 % or € 0.4 million to € 19.9 million. The first quarter of the reporting year posted quite a different picture in relation to the distribution of sales: Sales in Germany were up by 7 %, while foreign business remained at the level of the previous year. The overall picture therefore presents a more balanced perspective. Sales for the half year amounted to € 122.2 million (+4 %) of which € 43.8 million was attributable to domestic business (+3 %) and € 78.4 million to foreign sales (+6 %).

Performance of plastic edgings continued extremely successful. As a leading global player, the companies of SBU Plastics which operate in the market for plastic edgings again increased their high level of sales by 9 %. The other plastic products, most of which are manufactured using technically sophisticated extrusion processes, continued their success. Skirtings, roller shutter systems, technical extrusions (profiles) and cladding systems went up by an average of 12 % during the first half of 2007.

STRATEGIC BUSINESS UNIT PAPER

The business with coating products applied to papers for technical applications continued to present difficulties. Although this line kept pace with the previous year's volumes during the first quarter of 2007, the subsequent quarter posted a decline of 4 % to € 41.1 million. The key factor here is that Surteco is increasingly withdrawing from activities characterized by weak margins and pressure on prices. Although this is reflected in declining sales, it results in significantly increased indicators for return. This process again impacted more significantly on foreign markets than on domestic business. With sales at € 26.5 million, this line fell back by 6 %. Contrary to the general trend, the American market succeeded in generating growth of 17 %, but during the months of April to June 2007 all the other foreign regions eased, with the 9-percent decline in EU countries outside Germany exerting the biggest impact. Business in Germany remained virtually constant at € 14.6 million.

On account of this development, the annual sales for the half year at the SBU Paper ( € 86.9 million) lagged 2 % behind the equivalent value for 2006. Modest domestic growth (+2 %) was more than cancelled out by the difficult situation in individual foreign markets. Foreign business lost ground amounting to 4 % and generated € 54.6 million.

A product-based perspective reveals a sustained negative trend for flat foils (-7 % in the first half

year of 2007). This is the consequence of increasingly intensive competition, in particular for preimpregnated foils, an area where SURTECO AG is conducting a strategic withdrawal. The paper edging segment fell back by € 0.7 million to € 33.6 million. By contrast, Bausch Decor GmbH producing specialist papers with decorative printed motifs is now undergoing an upward trend. Two new printing machines will start up in September in order to meet the increased demand. During the first half of the year, Bausch Decor increased foreign sales by 21 % to € 11.7 million.

EXPENSES»

MATERIAL AND PERSONNEL RATIO DOWN

The cost of materials amounted to € 90.0 million during the reporting period. It remained just below the half-year value for 2006. A significant reduction in the proportion of cost of materials in relation to sales amounting to 0.8 percentage points down to 42.6 % was generated as a function of higher overall output.

The raw materials market for plastics continues to be shaped by high levels of demand. This led to significant price hikes which could only be partly passed on to customers in the marketplace. By contrast, the strategically engineered reduction in the sale of goods held for resale resulted in a disproportionate reduction in the cost of materials for the SBU Plastics. While the paper processing segment had to accept higher cost prices for fewer chemical raw materials, prices for the majority of staple intermediate products remained stable. Raw papers for technical applications represent significantly more than half the volume of raw materials in the SBU Paper and substantial price reductions were negotiated during the first half of 2007.

No problems were experienced for availability and delivery times of intermediate products during the first half of 2007.

The number of employees in the SURTECO Group remained virtually the same as the previous year at 2,062 employees. However, there were shifts within the Strategic Business Units. In line with the development in sales, the number of employees in the SBU Paper fell back by 21 people to 780, whereas the headcount at the SBU Plastics went up by 18 persons due not least to the acquisition of Gardenia.

Personnel expenses in absolute terms remained below the equivalent year-earlier figure. The ratio (personnel expense/total output) came down by 0.5 % to 23.5 %. This reflects the efficiency enhancement programmes and the successful negotiations with the workforce.

At € 33.5 million other operating expenses were slightly above the figures for the 1st half year of 2006 ( € 33.3 million).

EARNINGS»

RETURN ON SALES AT 12.5 %

After the first six months of 2007, the earnings figures show a disproportionate growth compared with sales performance. EBITDA went up by 8 % to € 39.2 million. This corresponds to an EBITDA margin of 18.7 % (1st half year 2006: 17.6 %). EBIT rose from € 27.2 million to € 29.9 million, the EBIT margin from 13.2 % to 14.3 %. Earnings before tax (EBT) amounted to € 26.2 million (+11 %). The return on sales (EBT/sales) advanced to 12.5 % (1st half year 2006: 11.5 %).

On the basis of consolidated net income amounting to € 16.1 million (+10 %) earnings per share (net income per share) rose from € 1.32 (1st half year 2006) to € 1.45 during the reporting period.

NET ASSETS, FINANCIAL POSITION AND RESULTS OF OPERATIONS»

EQUITY RATIO REACHES 46.4 %

Compared with the balance sheet date of 31 December 2006, the balance sheet total increased by 4.5 % from € 373 million to € 390 million. The expansion project of Bausch Decor is about to be completed and this has brought about a rise of 3 % in property, plant and equipment. The increase in goodwill of 4 % is essentially derived from acquisition of the Skirtings subsection from French company SDCA and acquisition of the remaining shares (25 %) in ARBE s.r.l., Italy. Although substantial investments were made during the first half of the year, net financial debt liabilities were reduced 6 % to around € 120 million. The equity ratio rose by 2 percentage points to 46.4 % compared with the balance sheet at 31 December 2006. The gearing (debt ratio), i.e. the ratio of net financial liabilities to equity capital, fell from 77 % to 66 %.

CASH FLOW STATEMENT

Cash flow from operating activities went up from € 15.5 million to € 29.1 million compared with the previous year. On the basis of the investments carried out during the reporting period, cash and cash equivalents only underwent an insignificant change. Free cash flow increased by 174 % to € 15.8 million as a result of the strong cash flow from operating activities.

lc la io f fr h f lo Ca t u n o ee c as w
0 0 0s €	/ / 1 1 - 3 0 / 6 / 2 0 0 6	/ / 1 1 - 3 0 / 6 / 2 0 0 7
f fr C h in lo as om w in iv i t t ty op er a g ac	2 2, 3 7 6	3 5, 2 6 3
Ta ts x p ay m en	-6 9 6 9 ,	-6 1 1 3 ,
In in tm ts ve s en p ro p er la d ip t p n an eq m en u ( ho f l i in ia t t w u an c in ) tm ts ve s en	ty , t -9 6 2 9 ,	-1 3, 3 0 5
C h lo Fr F ee as w	8 5, 7 7	8 1 5, 4 5

RESEARCH AND DEVELOPMENT»

SUCCESSFUL NEW EDGING VARIATIONS

The DoellkenFlex edging made of unplasticized PVC was developed by SBU Plastics especially for the North American market. It offers customers impressive advantages compared with the carrier extrusions made of semi-hard PVC used previously, which still had to undergo manual processing. The 3 mm thick edging is so flexible that is can be easily used for very tight inside and outside radii. It can be easily processed using conventional hot-melt adhesive technology without the need for specific process expertise or new machinery. In Europe and particularly in Germany, lightweight boards are the latest trend in furniture design because of their solid visual appeal combined with low weight properties. Döllken has designed the bonding edge for this board as an innovative perforated support edge. Close cooperation with the leading machinery manufacturers means this edge has very variable applications and can be processed using a wide range of different edging procedures. The bonding edge provides industrial finishing processors with more flexibility in their selection of machinery and equipment. Research into development of a finish floor foil has moved forward in the SBU Paper. This project involved cooperation with a machinery manufacturer and successful installation of a coating station in the production of BauschLinnemann. The coating unit is able to apply a smooth coating with high abrasion resistance to any decor foils.

The foils manufactured in this way can be applied to a wood substrate in a standard laminating process. The first customer samples have already been successfully completed.

»SURTECO SHARES

The good operating performance of SURTECO AG has also been reflected in the share price performance during the reporting period. A half-year performance of 23 % placed the shares significantly above the equally positive development of the second-tier SDAX index (+17 %). The successful placement of around 420,000 shares owned by existing SURTECO shareholders increased the free float of the company by 19.9 % to 23.7 %. The latest step moves the company forward in its aim of consistently expanding the opportunities offered by the capital market. In accordance with the announcement by the shareholders and the Board of Management, further measures are planned in this respect with the aim of obtaining a listing for the SURTECO share in the SDAX index.

io d Pe Ja Ju 2 0 0 7 r nu ar y ne -
be f ha N um r o s re s f lo in % Fr t ee a	1 1, 0 7 5, 5 2 2 2 3 7
ic in Pr 2 / 1 / 2 0 0 7 € e on Pr ic 2 9 / 6 / 2 0 0 7 in € e on fo fo ha ic he S t re p r e p er rm an ce r	3 2 6 0 4 0 2 0
f ha l f- irs 2 0 0 7 in % t y ea r ig h in H € Lo in € w	2 3 + 4 2 2 0 3 2 6 0
ke l M i iz io t ta t ar ca p a n in 3 0 / 6 / 2 0 0 7 € 0 0 0s t as a	4 4 5, 2 3 6

Share price performance January - June 2007 in €

»OUTLOOK FOR BUSINESS YEAR 2007

As at 30 June 2007, the key economic framework data for the SURTECO Group had hardly changed by comparison with the business year 2006. Assuming that this trend continues to apply in the second half of 2007, we anticipate that sales and earnings will outperform the previous year. However, this statement is subject to the condition that the costs of energy and raw materials continue at the present level for the remainder of the year and that no major adverse developments occur in the foreign exchange markets relevant for SURTECO.

» CONSOLIDATED INCOME STATEMENT 1617

S U	R T E	C O	G R O	U P

	Q 2		Q 2 1-
0 0 0s €	1 / 4 /- 3 0 / 6 / 2 0 0 6	1 / 4 /- 3 0 / 6 / 2 0 0 7	1 / 1 /- 3 0 / 6 / 2 0 0 6	1 / 1 /- 3 0 / 6 / 2 0 0 7
le Sa s re ve nu es	9 9, 4 4 6	1 0 1, 4 7 8	2 0 5, 6 6 0	2 0 9, 1 1 0
ha C in in ie nt ng es ve or s	-3 1 7	8 8 6	1, 6 4 8	1, 6 0 8
k l d O ita iz w n w or ca p e	2 1 1	2 6 5	2 2 2	5 7 7
l o To ta tp t u u	9 9, 2 5 0	0 2, 6 2 9 1	2 0 7, 5 3 0	2 2 9 1 1, 5
f ha d ia ls C t te os o p ur c se m a r	-4 3, 0 4 9	-4 3, 6 1 5	-9 0, 1 2 3	-9 0, 0 1 1
l e Pe rs on ne xp en se s	-2 4, 8 3 2	-2 5, 0 7 5	-4 9, 8 9 6	-4 9, 7 2 2
he O in t t r o p er a g ex p en se s	-1 5, 9 3 2	-1 6, 2 3 5	-3 3, 2 6 5	-3 3, 4 5 8
he O in in t t r o p er a g co m e	2 2 3 1,	5 7 3	9 2 1, 1	1, 0 9 1
E B I T D A	1 6, 6 6 0	8, 2 1 7 7	3 6, 1 5 8	3 9, 9 1 5
ia io d iza io De t t t p re c n an am or n	-4 4 6 6 ,	-4 6 7 6 ,	-8 9 4 3 ,	-9 2 7 9 ,
E B I T	1 2, 1 9 4	1 3, 6 0 1	2 7, 2 1 5	2 9, 9 1 6
l r lt F in ia an c es u	6 8 -1 5 ,	-1 7 9 4 ,	-3 6 0 1 ,	-3 7 1 1 ,
E B T	1 0, 5 3 6	8 0 1 1, 7	2 3, 6 1 4	2 6, 2 0 5
In ta co m e x	-4 0 1 7 ,	-4 6 8 2 ,	-8 9 0 7 ,	-1 0, 1 0 8
in N t e co m e	6, 5 1 9	7, 1 2 5	1 4, 7 0 7	1 6, 0 9 7
f w h h l da d i ic i in te t co ns o ne co m e -	6, 4 5 4	7, 1 2 5	1 4, 5 7 7	1 6, 0 9 7
f w h h ic in ity in te ts - o m or re s	-6 5	0	3 0 -1	0
ic d d i lu d in ha in Ba € te s an ea rn g s p er s re	0. 5 8	0. 6 4	1. 3 2	1. 4 5
be f s ha iss d N um r o re s ue	1 1, 0 7 5, 5 2 2	1 1, 0 7 5, 5 2 2	1 1, 0 7 5, 5 2 2	1 1, 0 7 5, 5 2 2

» CONSOLIDATED BALANCE SHEET SURTECO GROUP 19

18

0 0 0s €	3 1 / 1 2 / 2 0 0 6	3 0 / 6 / 2 0 0 7
A S S E T S
h d h le C iva nt as an ca s eq u s	2, 2 3 3	3, 5 8 2
de iva b le Tr nt a a cc ou s re ce	2 9, 9 5 3	3 4, 7 5 5
ie In nt ve or s	5 9, 8 6 3	6 1, 7 2 4
he O t nt ts r c ur re a ss e	1 1, 9 7 8	1 2, 5 1 0
C nt ts ur re a ss e	1 0 4, 0 2 7	2, 1 1 5 7 1
la d Pr ip ty nt t op er , p a n eq u m en	1 5 8, 6 2 3	1 6 3, 4 1 0
i b le In ta ts ng a ss e	4, 6 2 1	8 4, 4 7
dw i l l G oo	9 7, 5 4 5	1 0 0, 9 6 1
In tm ts ve s en	9 3 8 1,	1, 9 0 8
he O t nt ts r n on -c ur re a ss e	1, 4 7 7	2, 0 0 8
N t ts o n- cu rr en as se	2 6 4, 2 0 4	2 7 2, 7 6 5
fe d D ta t e rr e x as se	4, 9 6 7	4, 7 3 8
	3 7 3, 1 9 8	3 9 0, 0 7 4

» CONSOLIDATED BALANCE SHEET SURTECO GROUP 21

20

€ 0 0 0s	3 1 / 1 2 / 2 0 0 6	3 0 / 6 / 2 0 0 7
L I A B I L I T I E S A N D S H A R E H O L D E R S ' E Q U I T Y
ho de b S rt -t t er m	5 1, 7 2 8	4 6, 5 6 4
de b le Tr nt a a cc ou s p ay a	2 2, 7 4 4	2 4, 1 2 8
l ia b i l it ie Ta x s	4, 3 7 6	6 7, 4 1
ho d S rt -t er m a cc ru e ex p en se s	1, 9 5 7	2, 8 8 5
he l b l O ia i it ie t nt r c ur re s	1 8, 1 5 4	2 0, 6 5 4
C l ia b i l it ie nt ur re s	9 8, 9 5 9	0 6 1 1, 4 7
de b Lo -t t ng er m	7 8, 2 8 4	7 6, 9 4 7
io d im i la b l ig io Pe t ns ns a n s r o a ns	1 2, 6 3 1	2, 8 6 2 1
he l ia b i l it ie O t nt r n on -c ur re s	3 0 7	0
l b l N ia i it ie t o n- cu rr en s	9 1, 2 2 2	8 9, 8 0 9
fe d l ia b i l ity D ta e rr e x	1 7, 3 3 9	1 7, 6 3 1
C ita l s k to ap c	1 1, 0 7 6	0 6 1 1, 7
Re se rv es	1 2 5, 0 9 6	1 2 5, 0 5 3
f N it t e p ro	2 8, 6 7 1	4 4, 8 5 8
it l a i bu b le ha ho l de Ca t tr ta t p a o s re rs	1 6 4, 9 3 3	1 8 0, 9 8 7
in ity in M te ts or re s	7 4 5	0
l Eq ity it u c ap a	6 6 8 1 5, 7	1 8 0, 9 8 7
	3 7 3, 1 9 8	3 9 0, 0 7 4

» CONSOLIDATED CASH FLOW STATEMENT SURTECO GROUP 2223

	Q 2 1-
0 0 0s €	/ /- 1 1 3 0 / 6 / 2 0 0 6	/ /- 1 1 3 0 / 6 / 2 0 0 7
be fo d Ea in in ta rn g s re co m e x an
in ity in te ts m o r re s	2 3, 6 1 4	2 6, 2 0 5
fe h f lo fr in Tr t an s rs o ca s om o ng o g w bu in iv it ie t s es s ac s	9, 3 4 5	1 2, 5 2 8
f l in in In te rn a an c g	3 2, 9 9 5	3 8, 7 3 3
ha in C t nt ts ng e n e cu rre a ss e	-1 7, 4 9 0	-9 5 8 2 ,
h f lo fr bu in io Ca nt t s s o m c ur re s es s o p er a ns w	1 5, 4 6 9	2 9, 1 5 1
f fr C h lo in iv it ie tm t t as w om ve s en ac s	-9 2 9 3 ,	-1 9, 2 7 2
h f lo fr f in in iv it ie C t as w om an c g ac s	-4 5 7 2 ,	-8 5 3 0 ,
ha in h d h iv le C nt ng e c as an ca s eq u a s	1, 6 0 4	1, 3 4 9
C h d h iva le nt as an ca s eq u s
1 Ja nu ar y	2, 2 0 9	2, 2 3 3
3 0 Ju ne	3, 8 1 3	3, 5 8 2

» SCHEDULE OF EQUITY CAPITAL SURTECO GROUP 2425

0 0 0s €	l Ca ita p k st oc	d d l A it io na l ita ca p i d in p a	he Ot r c om he ive p re ns in co m e	Re ve nu e re se rv es	l Co i ns o da d te t ne in co m e	M in ity or in te st re s	l To ta
3 be 2 0 0 1 D 5 ec em r	0 6 1 1, 7	0, 6 5 4 1	0 -4 4	6 3 2 5, 5	2 8 3 1, 1	6 9 6	8, 9 6 1 4 7
iv i de d D t n p ay ou	0	0	0	0	-8 8 6 0 ,	0	-8 8 6 0 ,
Ne in t co m e	0	0	0	0	1 4, 5 7 7	1 3 0	1 4, 7 0 7
O he ha t r c ng es	0	0	0	0, 0 8 1 4	2, 9 -1 7 1	0	-2 8 8 7 ,
3 0 Ju 2 0 0 6 ne	1 1, 0 7 6	5 0, 4 1 6	-4 0 4	7 5, 4 3 6	1 4, 5 7 7	8 2 6	1 5 1, 9 2 7

be 3 1 D 2 0 0 6 ec em r	1 1, 0 7 6	5 0, 4 1 6	-3 8 6	0 6 6 7 5,	2 8, 7 6 1	7 4 5	6 6 8 1 5, 7
in Ne t co m e	0	0	0	0	1 6, 0 9 7	0	1 6, 0 9 7
f A is it io in ity in te ts cq u n o m or re s	0	0	0	0	0	-7 4 5	-7 4 5
he ha O t r c ng es	0	0	0	-4 3	0	0	-4 3
3 0 Ju 2 0 0 7 ne	1 1, 0 7 6	5 0, 4 1 6	-3 8 6	7 5, 0 2 3	4 4, 8 5 8	0	1 8 0, 9 8 7

» SEGMENT REPORTING2627

SURTECO GROUP

SALES REVENUES AND EARNINGS BY STRATEGIC BUSINESS UNITS

	Se t g m en	re ve nu es	in O t t p er a g se g m en in be fo in te t ea rn g s re re s ( f l r lt ) d in ia ta an c es u an xe s
0 0 0s €	1 / 1 /- 3 0 / 6 / 2 0 0 6	/ 1 1- 3 0 / 6 / 2 0 0 7	1 / 1 /- 3 0 / 6 / 2 0 0 6	/ 1 1- 3 0 / 6 / 2 0 0 7
S la ics B U P t s	1 1 9, 5 5 2	2 2, 0 1 5 4	1 8, 3 9 6	9, 3 1 7 7
S B U Pa p er	8 9, 7 9 8	8 6 7, 4 7	1 1, 3 4 8	2, 2 8 1 5
i l ia io Re t co nc n	-3 6 9 0 ,	-1 0 4 1 ,	-2 5 2 9 ,	-2 3 8 5 ,
S U R T E C O G ro up	2 0 5, 6 6 0	2 0 9, 1 1 0	2 7, 2 1 5	2 9, 9 1 6

SALES REVENUES BY REGIONAL MARKETS

	S U R T E C O	G ro up
€ 0 0 0s	1 / 1 /- 3 0 / 6 / 2 0 0 6	1 / 1 /- 3 0 / 6 / 2 0 0 7
G er m an y	7 4, 5 8 5	7 6, 2 6 1
(w ho ) Eu it G t ro p e u er m an y	8 2, 2 5 5	8 5, 5 6 7
A ica m er	3 5, 2 0 0	3 1, 5 1 6
l he A ia A ia O tr t s us a rs , ,	1 7, 3 1 0	1 6, 8 0 7
	2 0 9, 3 0 5	2 0, 1 1 5 1
i l ia io Re t co nc n	-3 6 9 0 ,	0 -1 4 1 ,
l S C O G To ta U R T E ro up	2 0 6 6 0 5,	2 0 9, 0 1 1

28 29 SEGMENT REPORTINGSURTECO GROUP

SALES REVENUES BY REGIONAL MARKETS

	S la ic B U P t s s
0 0 0s €	1 / 1 /- 3 0 / 6 / 2 0 0 6	1 / 1 /- 3 0 / 6 / 2 0 0 7
G er m an y	4 2, 7 4 0	4 3, 8 4 2
(w it ho ) Eu G t ro p e u er m an y	3 8, 8 8 8	4 3, 0 9 8
ica A m er	2 6, 0 9 9	2 3, 1 2 9
ia l ia he A A O tr t s us a rs , ,	1 1, 8 2 5	1 2, 4 3 5
	1 1 9, 5 5 2	1 2 2, 5 0 4
l Re i ia io t co nc n	-2 5 9 0 ,	-3 0 7
l la To S B U P ic ta t s s	1 1 6, 9 6 2	1 2 2, 1 9 7

	S B U Pa p er
0 0 0s €	1 / 1 /- 3 0 / 6 / 2 0 0 6	1 / 1 /- 3 0 / 6 / 2 0 0 7
G er m an y	3 1, 8 4 5	3 2, 4 1 9
(w it ho ) Eu G t ro p e er m an u y	4 3, 3 6 7	4 2, 4 6 9
ica A m er	9, 1 0 1	8, 3 8 7
l he A ia A ia O tr t s us a rs , ,	5, 4 8 5	4, 3 2 7
	8 9, 7 9 8	8 7, 6 4 7
l Re i ia io t co nc n	-1 1 0 0 ,	-7 3 4
l To S B U Pa ta p er	8 8, 6 9 8	8 6, 9 1 3

» NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FIRST HALF YEAR 2007 (SHORT VERSION) 3031

ACCOUNTING PRINCIPLES

The consolidated financial statements of the SURTECO AG for the period ending 31 December 2006 were prepared in accordance with the regulations of the International Financial Reporting Standards (IFRS) applicable on the balancesheet date, as they were adopted by the EU. The same accounting and valuation principles as in the preparation of the consolidated financial statements for the year 2006 are applied in drawing up the interim financial report for the half year ended on 30 June 2007, which has been prepared on the basis of the International Accounting Standard (IAS) 34 "Interim Financial Reporting". All the binding interpretations of the International Financial Reporting Interpretations Committee (IFRIC) applicable as at 30 June 2007 were applied when the interim report was prepared, insofar as they are relevant to SURTECO. In addition, the regulations of DRS 16 (near final draft status 18 July 2007) of the Accounting Standards Committee of Germany (DRSC) were also applied. The half-year financial report was not audited by a company auditor and an audit review was not carried out.For further detailed information on the accounting and valuation principles applied, we refer to the consolidated financial statements of SURTECO AG for the year ending 31 December 2006. The group currency is denominated in euros. All amounts are given in thousand euros ( € 000s) unless otherwise stated.

GROUP OF CONSOLIDATED COMPANIES

Apart from SURTECO AG, 14 domestic and 20 foreign subsidiaries are included in the half-year financial statements for the year 2007. During the first half of 2007, Döllken France S.A.S., France, was included in the consolidation for the first time.

REPORT ON IMPORTANT BUSINESS TRANS-ACTIONS WITH AFFILIATED PERSONS

During the period under review, the company had no business transactions with affiliated persons that could have exerted a material influence on the net assets, financial position and results of operations of the companies, nor did the company conclude any such transactions at standard commercial conditions

ASSURANCE BY THE LEGAL REPRESENTATIVES

In our opinion and to the best of our knowledge, we should like to provide assurance that in accordance with the applicable accounting principles for interim reporting, the consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Group and the interim consolidated management report provides a suitable understanding that corresponds to a true and fair view of the business performance including the business results and the Group's position, and suitably presents the risks and opportunities of the future development of the Group in the remaining business year.

Buttenwiesen-Pfaffenhofen, 10 August 2007

Friedhelm Päfgen Dr.-Ing. Herbert Müller

Chairman of the Member of the Board of Management Board of Management

Calculation of indicators:

Capital ratio in % Equity capital/balance-sheet total

Cash Earnings in € Net income + amortization and depreciation ./. write-ups change in long-term provisions in the income statement

EBIT margin in % EBIT/sales revenues

EBITDA margin in % EBITDA/ sales revenues

Earnings per share in € Consolidated net income / number of shares

Gearing (debt level) in % (Current and non-current financial liabilities ./. liquid assets)/equity capital

Market capitalization Number of shares x share price on the balance sheet date

Cost of materials ratio in % Cost of materials / total output

Net financial debt in €(Current financial liabilities + non-current financial liabilities) ./. liquid assets

Personnel expense ratio in % Personnel expense ratio / total output

Return on sales in % (Consolidated net income + income tax)/sales revenues

Working Capital in € (Trade receivables + inventories) ./. (Trade liabilities + short-term accrued reserves)

FINANCIAL CALENDAR

31 August 2007 General Annual Meeting, Gasteig, Munich

• 3 September 2007 Dividend payout
• 9 November 2007 Report for the first three quarters 2007
• 30 April 2008 Annual report 2007

ticker symbol: SURisin: DE0005176903

Investor Relations and Press Offi ce

Andreas RiedlChief Financial Offi cer Phone +49 (0) 8274 9988-563

Günter SchnellerInvestor Relations and Press Offi cerPhone +49 (0) 8274 9988-508

Fax +49 (0) 8274 9988-515 E-Mail ir@surteco.comInternet www.surteco.com