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SÜSS MicroTec SE

Interim / Quarterly Report Aug 3, 2006

422_10-q_2006-08-03_bb904b71-9754-43bb-b1f9-e5a26a9053e7.pdf

Interim / Quarterly Report

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in Euro million Q2-06 Q2-05 Change
in %
1.Hy-06 1.Hy-05 Change
in %
Order entry 36.9 27.9 32.4% 77.5 51.9 49.4%
Order backlog
as of 30.06.
77.2 69.5 11.1%
Total sales 43.1 28.3 52.2% 82.1 48.0 71.1%
Sales margin in % 14.6% -7.3% 12.1% -15.4%
Gross profit 20.9 10.5 99.9% 38.5 17.4 >100%
Gross margin 48.5% 36.9% 46.8% 36.3%
Costs of sales 22.2 17.8 24.2% 43.7 30.6 42.9%
EBITDA 9.3 0.3 >100% 15.9 -2.5 >100%
EBITDA margin 21.6% 1.1% 19.4% -5.2%
EBIT 7.8 -1.2 >100% 12.6 -6.1 >100%
EBIT margin 18.0% -4.4% 15.3% -12.7%
Earnings after tax 6.3 -2.1 >100% 10.0 -7.4 >100%
Earnings per share.
diluted
0.36 -0.14 >100% 0.58 -0.49 >100%
Shareholders' equity 93.6 77.7 20.4%
Equity ratio 61.5% 48.4%
Return on equity 6.7% -2.7% 10.6% -9.5%
Balance sheet total 152.2 160.5 -5.2%
Net Cash 8.4 -3.6 >100%
Free Cash Flow -5.5 -6.5 15.6% 1.2 -2.8 >100%
Investments 1.9 1.0 88.5% 3.6 2.4 49.8%
Investment ratio 4.4% 3.6% 4.4% 5.0%
Depreciation and
amortization
1.5 1.6 -2.2% 3.4 3.6 -7.2%
Employees as of 30.06. 708 686 3.2%

Content

Foreword by the Management Board 2

Sales and Earnings

C4NP: Reliability Testing successfully completed 5 SAIT researches with SUSS-Mask Aligner for Samsung 5 SUSS MicroTec-Shareholders have cast their votes 6 Sales and Segment Figures 7

Directors' Dealings 9

Financial report

Consolidated Statement of Income and Comprehensive Income 10 Consolidated Balance Sheet 12 Consolidated Statement of Cash Flows 14 Consolidated Statement of Shareholders' Equity 16 Segment Information by Business Segment 18 Segment Information by the Region 18 Selected Explanatory Notes to the Interim Report 20

Structure of the Group Corporate Calendar Imprint/ Contact

Foreword by the Management Board

+++ + + + +++ + + + +++ + + + +++ +++ +++ +++ + + + + + + +++ + + + + +

2

Dear shareholders, employees and business partners of SUSS MicroTec AG,

The extremely positive development of business continued as before in the second quarter of 2006. As in the fourth quarter of 2005 and the first quarter of this year, order entries, sales and earnings showed a highly robust trend. As a result, the second quarter again ended with positive earnings after tax (EUR 6.3 million, compared with EUR 2.1 million in the second quarter of 2005).

Seen from the half-yearly perspective, the picture is again extremely positive: order entries amounted to EUR 77.5 million, compared with EUR 51.9 million in the first half of 2005 (plus 49 percent). Group sales increased to EUR 82.1 million in the reporting period – compared with EUR 48.0 million in the corresponding period of the previous year (plus 71 percent). Gross profits came to EUR 38.5 million (first half of 2005: EUR 17.4 million, plus 121 percent), with the result that SUSS MicroTec generated a remarkably positive gross profit margin of 46.8 percent – in the corresponding period of the previous year this was only 36.3 percent. EBIT amounted to EUR 12.6 million – compared with EUR -6.1 million in the first half of 2005. Ultimately, then, earnings after tax came to EUR 10.0 million, compared with EUR -7.4 million in the corresponding period of the previous year.

We are delighted to take this pleasing trend in the SUSS MicroTec Group's business as an opportunity to increase our forecast for 2006 as a whole: we now expect Group sales to total at least EUR 150 million. In addition, we are expecting an EBIT margin of at least eight to ten percent of sales.

The fact that we have such good figures to report can be attributed primarily to the development of the Lithography segment, which continues to be remarkable.This segment generates more than half of the Group's total sales. In the last quarter it was again evident that the restructuring meas-

ures are taking effect: final inspections and acceptance on customers' premises, for example, are proceeding far more quickly than in the previous year – a sign of optimization in both the production and service areas. The improved cost structure, in conjunction with high capacity utilization, is leading to a discernible increase in the gross profit margin. In addition, the demand for our products continues to be very high – particularly in the area of microsystems technology. This market is still generating very high demand for sensors for airbags, inkjet print heads and GPS systems – these are all microsystems technology applications. In addition, high-performance chips of the types required for mobile devices such as handsets, notebooks and so forth are still very much in demand. Recently, moreover, the trend towards integration – meaning that, for example, a PDA, a handset and a camera are integrated within a single mobile device – has intensified. Since end users have no wish to return to mobile devices as large as the first mobile phones, however, chips of ever increasing efficiency are having to be accommodated on comparatively small surfaces. This trend is benefiting us because it is one of the areas served by advanced packaging.

In the second-largest segment, Test Systems, the positive level of order entries in the second quarter of 2006 confirms our assumption that the market for testing and checking systems remains intact. In the past, the Test Systems segment has already proved itself to be the steadiest. The segment's earnings also improved significantly in the half-yearly comparison, thanks primarily to higher gross profit margins.

The Device Bonder segment is developing in line with our expectations: Here too, the cost reduction measures took effect, with the result that the segment's earnings more than broke even in the first half of the year. The current orders position – demand from the infrared sensors market remains good – makes us confident that this segment's current performance in France will persist, also for 2006 as a whole.

The Substrate Bonder segment was another in which we posted significant increases in sales and order entries in the first six months of the year. We are also expecting order entries to post another increase in the third quarter – one of the most important indicators when a new product line is being launched.

Ladies and Gentlemen, in the first six months of this fiscal year we achieved highly gratifying successes in almost every segment as far as the most important indicators – order entries, sales and earnings – are concerned, and the outlook for the year as a whole is very positive indeed.The markets are intact, and our products are in demand. SUSS MicroTec is well on the way to ending 2006 with significantly positive results.

Garching, August 2006

Dr. Stefan Schneidewind Stephan Schulak

Chief Executive Officer Chief Financial Officer

Foreword Sales and Earnings Financial Report 5
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Lithography Segment
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receives award
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Shareholders' Meeting 2006
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Sales and Earnings

C4NP: Reliability Testing successfully completed

In May, the initial reliability tests undertaken by IBM for 300mm lead free C4NP solder bumped wafers was successfully completed. No failures could be attributed to the C4NP process.

SUSS is currently building a high volume manufacturing C4NP tool set for IBM in preparation for production use. C4NP stands for Controlled Collapse Chip Connection - New Process and is the next generation of wafer bumping technology developed by IBM. Pioneered by IBM, C4NP is a breakthrough in wafer solder bump technology, an Advanced Packaging technique that places pre-patterned solder balls onto the surface of a chip. C4NP is a simple and cost-effective alternative to the expensive and difficult electroplating process. Bulk solder is injection molded into glass molds and subsequently transferred from mold to wafer in a single step. C4NP combines the simplicity and cost effectiveness of solder paste printing with the fine pitch capabilities of electroplating and is a key enabler of 300mm lead-free solder bumping.

SAIT researches with SUSS-Mask Aligner for Samsung

In June, SAIT (Samsung Group's central R&D organization) has purchased a SUSS "MA200Compact" Mask Aligner for its central research facility in Korea. SAIT will use the production aligner from SUSS MicroTec for various R&D projects, such as the fabrication of MEMS and display devices.

In recent years SAIT has emerged as the main technology driver behind the global Samsung organization. In order to meet the tough quality demands made on the top-class R&D facility , SAIT has to rely on equipment that combines superior product performance and an attractive cost of ownership with the flexibility to serve different markets and applications. The MA200Compact from SUSS MicroTec perfectly suites those needs which is why SAIT employs SUSS MicroTec-equipment.

SUSS MicroTec-Shareholders have cast their votes

At this year's Shareholders' Meeting on June 20th in Munich, the shareholders and proxies who were present represented 2,900,245 no par value shares – and thereby 17 percent of capital stock.The annual financial statements of SUSS MicroTec AG and the consolidated financial statements as per December 31st 2005 as well as the first quarter of 2006 were explained by the Management Board.

As usual, the Management and Supervisory Boards were available for a detailed question and answer session.

All points on the agenda were approved with a large majority.The agenda, the speech by the Management Board, the presentation and further information about the Shareholders' Meeting 2006 can be obtained on our homepage: www.suss.com/Investor Relations/Shareholders' Meeting.

Foreword Sales and Earnings Financial Report 7
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Lithography Segment
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13.5 11.7

Net assets

Foreword Sales and Earnings Financial Report 9
Lithography Segment
successful
Substrate Bonder Segment
receives award
Invitation to the
Shareholders' Meeting 2006
> Sales and Segment figures
> Directors' Dealings
Management Board: Options Shares
Dr. Stefan Schneidewind 109,648 6,571
Stephan Schulak 120,286 13,000
Supervisory Board: Shares
Dr. Winfried Süss 1,131,000
Gerhard Rauter
Dr. e. h. Horst Görtz 17,216
Peter Heinz 1,338
Prof. Dr. Anton Heuberger
Dr. Christoph Schücking 500

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10

Financial Report

IFRS – Consolidated Statement of Income

TEUR 04/01/06 – 06/30/06
Sales 43.057
Cost of sales -22.162
Gross profit 20.895
Selling costs -6.216
Research and development costs -1.479
Administration costs -4.727
Other operating income 716
Other operating expenses -1.420
Result from at-equity investments 0
Analysis of net income from operations (EBIT):
EBITDA (Earnings before Interest and Taxes,
Depreciation and Amortization)
9.304
Depreciation and amortization of tangible assets,
intangible assets and investments in subsidiaries
-1.535
Net income from operations (EBIT) 7.769
Interest expenses -177
Interest income 150
Income before taxes 7.742
Income taxes -1.447
Net profit or loss 6.295
Thereof minority interests 23
Thereof equity holders of SUSS MicroTec 6.272
Earnings per share
Basic earnings per share in EUR 0,37
Diluted earnings per share in EUR 0,36
Foreword Sales and Earnings Financial Report 11
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+
04/01/05 – 06/30/05 01/01/06 – 06/30/06 01/01/05 – 06/30/05
28.296 82.118 47.981
-17.843 -43.663 -30.552
10.453 38.455 17.429
-5.528 -11.915 -10.829
-2.262 -3.604 -3.727
-4.967 -9.769 -10.949
1.264 1.249 2.693
-208 -1.843 -703
0 0 -22
321 15.934 -2.486
-1.569 -3.361 -3.622
-1.248 12.573 -6.108
-472 -558 -1.001
210 241 326
-1.510 12.256 -6.783
-552 -2.296 -600
-2.062 9.960 -7.383
-21 42 -21
-2.041 9.918 -7.362
-0,14 0,59 -0,49
-0,14 0,58 -0,49

IFRS – Consolidated Balance Sheet

TEUR
Assets 06/30/06 12/31/05
Non-current assets 49,559 50,401
Intangible assets 13,678 13,668
Goodwill 22,998 23,560
Tangible assets 5,277 5,384
Other investments 33 33
Other assets 349 364
Deferred tax assets 7,224 7,392
Current assets 102,634 106,920
Inventories 57,773 53,837
Accounts receivable 22,523 23,681
Securities 31 58
Tax assets 1,983 1,120
Cash and cash equivalents 18,159 26,325
Other assets 2,165 1,899
Total assets 152,193 157,321
Foreword Sales and Earnings Financial Report 13
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balance Sheet
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+
TEUR
Liabilities & shareholders' equity 06/30/06 12/31/05
Shareholders' equity 93,577 84,165
Common stock 16,799 16,793
Reserves 76,723 66,640
Accumulated other comprehensive income -36 683
Minority interests 91 49
Non-current liabilities 12,964 13,800
Pension provisions 2,543 2,581
Other provisions 392 455
Financial debt 5,199 5,957
Other liabilities 306 245
Deferred tax liabilities 4,524 4,562
Current liabilities 45,652 59,356
Other provisions 3,881 3,968
Tax liabilities 2,147 394
Financial debt 4,529 12,832
Accounts payable 6,351 6,061
Other liabilities 28,744 36,101
Total liabilities & shareholders' equity 152,193 157,321

IFRS – Consolidated Statement of Cash Flows

+ + + + + +++ + + + +++ + + + +++ +++ +++ +++ + + + + + + +++ + + + + +

14

TEUR 01/01/06 –
06/30/06
01/01/05 –
06/30/05
Net profit or loss 9,960 -7,383
Amortization of intangible assets 2,174 1,932
Depreciation of tangible assets 1,187 1,668
Change of at-equity measured associates 0 22
Profit or loss on disposal of intangible and tangible assets 2 2
Change of reserves on inventories 1,352 -227
Change of reserves for bad debts 70 245
Non-cash stock based compensation 164 230
Non-cash income from the reversal of provisions -82 -888
Non-cash interest expenses from increase of
convertible debt
116 240
Other non-cash effective income and expenses -1,077 -1,872
Change in inventories -3,616 -2,221
Change in accounts receivable 2,062 9,408
Change in other assets -1,114 -1,195
Change in pension provisions -38 -20
Change in accounts payable 97 -1,173
Change in other liabilities and other provisions -6,596 540
Change of deferred taxes 130 347
Cash Flow from operating activities 4,791 -345
Foreword Sales and Earnings Financial Report 15
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Statement of income
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Statement of Cash Flows
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Statement of
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Shareholders' Equity
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Segment Reporting
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+
TEUR 01/01/06 –
06/30/06
01/01/05 –
06/30/05
Payments in tangible assets -1,222 -812
Payments in intangible assets -2,399 -1,606
Cash Flow from investing activities -3,621 -2,418
Increase of bank loans 378 0
Repayment of bank loans -4,422 -1,260
Repayment of convertible bond -3,622 0
Change of current bank liabilities -1,200 -1,072
Change in other financial debt 7 133
Proceeds from issuance of common stocks -251 -92
Cash Flow from financing activities -9,110 -147
Adjustments to funds caused by exchange-rate
fluctuations
-226 477
Change in cash and cash equivalents -8,166 -2,433
Funds at beginning of the year 26,325 22,534
Funds at end of the period 18,159 20,101
Cash Flow from operating activities includes:
Interest paid during the period 359 652
Interest received during period 241 326
Tax paid during the period 567 70
Tax refunds during the period 35 342

IFRS – Consolidated Statement of Shareholders' Equity

+ + + + + +++ + + + +++ + + + +++ +++ +++ +++ + + + + + + +++ + + + + +

16

Number of Additional
TEUR shares
(in thousands)
Subscribed
capital
paid-in
capital
As of 01 January 2005 15,157 15,157 84,917
Issuance of shares:
Exercise of stock options 120 120 13
Issuance of subscription
rights
230
Net profit and loss
Unrealized loss from securities
net of tax
Foreign currency adjustment
As of 30 June 2005 15,277 15,277 85,160
As of 01 January 2006 16,793 16,793 90,673
Issuance of shares:
Exercise of stock options 6 6 1
Issuance of subscription
rights
164
Net profit loss or loss
Unrealized loss from securities
net of tax
Foreign currency adjustment
As of 30 June 2006 16,799 16,799 90,838
Foreword Sales and Earnings Financial Report 17
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+ Statement of income
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+ balance Sheet
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Statement of Cash Flows
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Statement of
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Shareholders' Equity
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+ Segment Reporting
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+ +
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+ + + +
+
+ + + + +
+
+ Notes
+
+
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+
+ +
+
+ + +
+
+ + +
+
+
+ +
+
+ +
+
+ +
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+
+ + + +
+
+ + + + +
+
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+ + +
+
+ + +
+
+
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+
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+
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+
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+ + + +
+
+ + + + +
+
+ +
+
+ +
+
+ +
+
+ + +
+
+ + +
Minority
interests
Accumulated
other compre-
hensive income
Retained
Earnings
Earnings
reserve
-902 -16,233 433
-21 -7,362
433
49 683 -24,466 433
42 9,918
-18
-701
91 -36 -14,548 433
44
23
-10
1,354
442
-23,595

+ +

IFRS – Segment Reporting

Segment Information by Business Segment

Lithography Substrate Bonder
1/1–6/30 1/1–6/30 1/1–6/30 1/1–6/30
TEUR 2006 2005 2006 2005
Sales 51,660 26,155 8,541 2,923
Result per segment 13,699 -3,018 -83 -2,204
Result from equity method accounting 0 -22 0 0
Significant non-cash items -807 713 -57 -140
Segment assets 68,716 69,853 14,438 13,274
thereof goodwill 13,599 13,599 0 0
Segment liabilities -21,913 -32,666 -3,005 -2,736
Depreciation and amortisation 1,778 1,984 540 381
thereof scheduled 1,618 1,506 540 0
thereof impairment loss 160 478 0 0
Capital expenditure 879 731 516 214
Average workforce during the year 284 286 80 74

Segment Information by Region

Sales Capital expenditure
1/1–6/30 1/1–6/30 1/1–6/30 1/1–6/30
TEUR 2006 2005 2006 2005
Europe 21,598 16,660 2,131 1,330
North-America 26,797 20,015 1,266 940
Japan 7,716 3,788 40 8
Rest of Asia 25,727 7,358 31 25
Rest of world 280 160 153 115
Consolidation effects 0 0 0 0
Total 82,118 47,981 3,621 2,418
Foreword Sales and Earnings Financial Report 19
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+
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+
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+ +
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+ +
+
+ +
+
+ +
+
+ + + Statement of income
+
+
+
+
+
+ +
+
+ + +
+
+ +
+
+
+ +
+
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Shareholders' Equity
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Segment Reporting
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Device Bonder Test Systems Other Total
1/1–6/30
2006
1/1–6/30
2005
1/1–6/30
2006
1/1–6/30
2005
1/1–6/30
2006
1/1–6/30
2005
1/1–6/30
2006
1/1–6/30
2005
2,810 3,287 12,640 11,392 6,467 4,224 82,118 47,981
470 135 899 -395 -1,549 -1,937 13,436 -7,419
0 0 0 0 0 0 0 -22
-661 134 132 -613 -111 546 -1,504 640
6,461 9,074 17,356 19,170 15,278 12,724 122,249 124,095
0 1,839 4,408 4,548 4,991 5,262 22,998 25,248
-2,468 -1,819 -5,697 -5,666 -3,545 -2,067 -36,628 -44,954
96 97 150 248 797 890 3,361 3,600
96 0 150 0 797 0 3,201 1,506
0 0 0 0 0 0 160 478
21 18 87 147 2,118 1,308 3,621 2,418
39 56 128 129 159 166 690 711
Assets
1/1–6/30
2006
1/1–6/30
2005
76,511 84,371
43,385 39,608
3,569 3,266
747 364
4,076 2,703
-6,039 -6,217
122,249 124,095

Selected Explanatory Notes to the Interim Report of SUSS MicroTec AG as of June 30, 2006

1. General accounting policies

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20

The consolidated financial statements of SUSS MicroTec AG as of December 31, 2005 were prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and valid as of the balance sheet date. The interim IFRS Group financial statements as of June 30, 2006, which have been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting", have been drawn up using all issued standards, which are valid on the balance sheet date.

All interpretations of the International Financial Reporting Interpretations Committee (IFRIC), which are mandatory as of June 30, 2006 have also been applied. In this resput, there were no changes to the consolidated financial statements as of December 31, 2005.

The interim IFRS financial statements were neither audited by the group's auditors, KPMG Deutsche Treuhand-Gesellschaft, Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft, nor did they undergo an auditing review.

The following new or revised standards and interpretations of the IASB and the IFRIC were mandatory for fiscal years beginning on or after January 1, 2006.

  • IFRIC 4 "Determining whether an Arrangement contains a Lease"
  • IFRIC 6 "Liabilities arising from Participating in a Specific Market Waste Electrical and Electronic Equipment"
  • Amendment to IAS 19 "Employee Benefits Actuarial Gains and Losses, Group Plans and Disclosures"
  • Amendment to IAS 39 "Financial Instruments: Recognition and Measurement"
Foreword Sales and Earnings Financial Report 21
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  • Amendment to IAS 39 und IFRS 4 "Financial Guarantee Contracts"
  • Amendment to IAS 21 "Effects of Changes in Foreign Exchange Rates"

However, either of the revised standards and interpretations did not have a significant impact on the assets, financial and earnings position or they were not relevant with respect to the interim IFRS financial statements.

For additional information on the individual accounting methods applied, please refer to the consolidated financial statements of SUSS MicroTec AG as of December 31, 2005.

All amounts are indicated in thousands of euros (EUR '000) unless otherwise noted

2. Changes in the Group structure

The financial statements of SUSS MicroTec AG and all of the relevant companies for which there is a group control option according to the control principle, irrespective of the level of participating interest, are included in the consolidated financial statements. With respect to the consolidated financial statements as of December 31, 2005, there were no changes within the consolidated group.

3. Facts subject to reporting requirements

In addition to the above, there were no circumstances during the interim reporting period which had any impact on the assets, liabilities, shareholders' equity, period results or cash flow and which were unusual due to their type, extent or frequency.

4. Revision of estimates

If estimates were made within the scope of the interim reporting, they shall remain essentially unchanged in methodology within the fiscal year and in the fiscal year comparison.

In contrast to the method of approach at year-end, the income tax expense in each interim reporting period is recorded on the basis of the best estimate of the weighted average annual income tax rate expected for the entire fiscal year.

As a result of valuation allowances made to capitalized loss carry-forwards in the past, SUSS MicroTec AG is presently assuming an annual income tax rate that will be considerably lower than the expected income tax rate of 37%.

Furthermore, there were no changes subject to reporting requirements that have a significant impact on the current interim reporting period.

5. Debenture bonds or equity securities

No issues, buybacks or repayments were effected during the reporting period, either for debenture bonds or for other equity securities.

As of April 30, 2006 the amount of TEUR 3,622 was due for repayment from the issued convertible bonds.

6. Dividends paid

No dividends were paid out or proposed for disbursement during the reporting period.

Foreword Sales and Earnings Financial Report 23
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7. Significant events after the close of the interim reporting period

There were no significant events subject to reporting requirements after the close of the interim reporting period.

8. Contingent liabilities and contingent claims

There are no contingent claims. There were no significant changes in contingent liabilities with respect to the reporting time frame of December 31, 2005.

9. Earnings per share

The undiluted earnings per share are determined by dividing the net income for the period accruing to the shares (after minority interests) by the average number of shares.

To determine the diluted earnings per share, the profit for the period to be attributed to the shareholders (after minority interests), as well as the weighted average of the shares in circulation, must be adjusted for the effects of all potentially diluting shares.

10. Changes in the Supervisory Board

At the shareholders' meeting held on June 20, 2006, Gerhard Rauter, Dresden, was elected member of the Supervisory board.Thomas Schlytter-Henrichsen stepped down from the Supervisory Board on June 20, 2006.

Structure of the Group

Corporate Calendar

COMS 2006 August 27 – 31 St. Petersburg, FL
SEMICON Taiwan September 11 – 13 Taipei, Taiwan
Ninemonth Report November 7
Micromachine 2006 November 7 – 9 Tokyo, Japan
SEMICON Japan December 6 – 8 Chiba, Japan

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Forward-looking statements: The reports contain forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and you should not place too much reliance on them. Forward-looking statements speak only as of the date they are

Imprint

Editor: SUSS MicroTec AG Editing: Investor Relations, Group Accounting Concept and Design: IR-One AG & Co., Hamburg Printer: Hartung Druck + Medien GmbH, Hamburg Translation: EnglishBusiness GbR, Hamburg

Contact

SUSS MicroTec AG Schleißheimer Straße 90 85748 Garching, Germany Phone: + 49 (0) 89 - 32007 - 0 E-mail: [email protected]

Investor Relations Phone: + 49 (0) 89 - 32007 - 314 E-mail: [email protected]

+++++++++++++++++++

made, and we undertake no obligation to update any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement.

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