TKH Group N.V.

Earnings Release • Aug 25, 2010

Press release

TKH Group N.V. (TKH) First half results 2010

TKH sees turnover and results improvements boosted in Q2

Highlights first half 2010

• Increase in turnover of 19%, Industrial Solutions strongest increase at 31%.
• Turnover share from innovations 21.2%.
• Innovations improve the market position in a large number of segments.
• Strong EBITA increase in Building and Industrial Solutions.

Highlights Q2 2010

• Turnover increase in Q2 34%.
• EBITA in Q2 up 42% compared with Q1.
• Improvement margin (ROS) in Q2 to 8.1%.

Outlook

• Expected net profit before amortisation of between € 34 and € 38 million for the full year 2010.

Key figures first-half year

(in € million unless otherwise stated)	st half 1	st half 1	Difference
	2010	2009	in %
Turnover	420.6	353.5	+ 19.0
EBITA before exceptional charges	30.4	13.8	+ 120.0
EBITA after exceptional charges	30.4	6.6
amortisation1) Net profit before and	17.9	4.4
exceptional charges
Net profit	16.0	-2.6
Net earnings per ordinary share (in €)	0.43	-0.08
Solvency ratio	42.9%	43.6%
ROS before exceptional charges	7.2%	3.9%
ROCE before exceptional charges	13.0%	9.4%

Key figures second quarter

(in € million unless otherwise stated)	Q2	Q2	Difference
	2010	2009	in %
Turnover	221.5	165.0	+ 34.2
EBITA before exceptional charges	17.8	8.4	+ 115.0
EBITA after exceptional charges	17.8	1.1
amortisation1) Net profit before and	10.5 2.4
exceptional charges
Net profit	9.5	-3.7
ROS before exceptional charges	8.1%	5.0%

1) Amortisation of intangible non-current assets relating to acquisitions (after taxes).

Alexander van der Lof, CEO of technology company TKH: "The improved market conditions combined with the great demand for our innovations translated into a considerable increase in the organic turnover for Building and Industrial Solutions. This, aided by the sharp reduction in cost levels, led to a substantial increase in profit. The expected market conditions in our segments are mixed. Based on the strong results in the first half and the encouraging order portfolio for most activities, we expect to close the full year with a strong result improvement."

Financial developments

In the first half of 2010, turnover rose by 19.0% to € 420.6 million (H1 2009: € 353.5 million). Higher raw materials prices affected the first half year turnover increase by 6.4%. The increase in turnover was very strong in the second quarter of 2010 with 34.2%.

The increase in turnover was realised within the Building and Industrial Solutions segments. Turnover in Telecom Solutions dropped slightly. The share in total turnover from Industrial Solutions increased to 45% from 41%, due to the above average increase in turnover. The share in the total turnover from Building Solutions remained unchanged at 38%, while the share in the total turnover from Telecom Solutions fell to 17%, from 21%. Innovations contributed strongly to the turnover increases. The contribution to turnover from innovations was 21.2%.

The gross margin as a percentage of turnover dropped from 41.3% to 38.8%. This drop was due to the increase in work in progress, a shift in the mix of activities and increased raw materials prices. Operating costs as a percentage of turnover were down at 31.6% in the first half of 2010, compared with 37.4% (before exceptional charges) in the first half of 2009. In the first half of 2010, targeted investments were made in the acceleration of innovations and the strengthening of the commercial organisation. In the course of the first quarter, the measures taken in 2009 to reduce working hours were fully reversed.

Depreciations, at € 6.9 million, were below the level of the first half of 2009 (H1 2009: € 8.2 million), due to the low investment levels of the past 18 months.

The operating result before amortisation of intangible assets (EBITA) increased with 120.0% from € 13.8 million (before exceptional charges) in the first half of 2009 to € 30.4 million in the first half of 2010.

In the second quarter of 2010, EBITA was up € 5.3 million (42.3%) compared with the first quarter of 2010. When compared to the second quarter of last year, EBITA more than doubled to € 17.8 million, from € 8.3 million. The improvement in the results was due partly to the efficiency measures resulting from the more focused deployment of resources within the group and the reduction of the overhead costs. The result in the Building and Industrial Solutions segments increased substantially due to the reduced cost levels and the increased turnover. The reduction in turnover at Telecom Solutions combined with the increased value of Asian currencies led to a drop in the result from this segment.

There were no exceptional items in the half year results of 2010.

The ROS (margin on the turnover) in the second quarter of 2010 increased to 8.1% from 6.3% in the first quarter of 2010.

Amortisation charges increased in the first half of 2010 to € 5.3 million (H1 2009: € 4.3 million), largely due to the capitalised R&D expenditure over the past 18 months.

Financial income and expenses dropped to € 2.4 million in the first half of 2010, from € 5.6 million in the first half of 2009. This decrease was due to currency exchange effects and a reduced debt burden. The tax burden was 29.8%.

Net profit before amortisation over the first half of 2010 was € 17.9 million (H1 2009: € 4.4 million excluding exceptional charges). Net profit after amortisation in the first half of 2010 was € 16.0 million (H1 2009: loss of € 2.6 million, including exceptional charges). Ordinary earnings per share came in at € 0.43 (H1 2009: minus € 0.08).

The net debt increased by €25.4 million compared to year-end 2009, to € 94.8 million, largely as a result of the increase in working capital due to the higher turnover. This resulted in a negative operational cash flow of € 1.8 million (H1 2009: € 65.9 million positive). Working capital as a percentage of turnover stood at 12.0% (H1 2009: 18.3%). The solvency ratio was down slightly at 42.9% (year-end 2009: 43.9%). TKH operates well within the financial ratios as laid down in its credit agreements. The net debt/EBITDA ratio was 1.4 and the interest coverage ratio stood at 8.5.

The number of people in permanent employment (FTEs) as per 30 June 2010 totalled 3,627 (year-end 2009: 3,564).

Developments per solutions segment

Telecom Solutions

Profile

Telecom Solutions develops, produces and delivers systems for applications from basic outdoor infrastructure for telecom and CATV networks to indoor home networking. The focus is on providing clients with care-free systems due to the system guarantees we provide. Around 40% of the portfolio consists of optical fibre and copper cable for nodeto-node connections. The remaining 60%, consisting of components and systems in the field of connectivity and peripheral equipment, is used mainly in the network's nodes.

(in € millions unless otherwise stated)	st half 1 2010	st half 1 2009	Difference in %
Turnover	70.3	74.0	- 5.1
EBITA 1)	5.4	8.8	- 38.9
ROS1)	7.6%	11.9%

Key figures first-half yearTelecom Solutions

1) Excluding exceptional charges in 2009

Turnover within the Telecom Solutions was down in the first half of 2010, falling to € 70.3 million. This drop was due entirely to the first quarter of 2010. Compared with the second quarter of 2009, turnover in the segment remained stable in the second quarter of 2010. Turnover in optical fibre networks systems and outdoor copper network systems was down, while turnover in indoor telecom systems increased.

EBITA fell to € 5.4 million in the first half of 2010. This drop was the result of the lower turnover and the ensuing reduced capacity utilisation level, due to the harsh winter conditions in the first quarter. The increase in value in Asian currencies and ensuing higher purchasing costs also had a negative impact on the EBITA.

Indoor telecom systems - home networking systems, broadband connectivity, IPTV-software solutions – turnover share 5.2%

Turnover increased by 10.5% due to the fact that upgrading hardware and software for broadband connections had a higher priority among consumers.

Fibre network systems – fibre optic, fibre optic cable, connectivity systems and components, active equipment – turnover share 6.4%

Turnover was down 14.2%. In the market segments within Europe and Asia where TKH is active, demand was down some 14% in the first half of the year. This was partly due to the harsh winter conditions in the first quarter of 2010, which stagnated the installation of the networks. In addition, the rollout of a number of projects was hindered by limited financing opportunities among our customers.

Copper network systems – copper cable, connectivity systems and components, active equipment – turnover share 5.1%

Turnover was down 6.1%, largely as a result of the harsh winter conditions in the first quarter of 2010. The second quarter saw a limited recovery of the level of maintenance investments in network nodes.

Building Solutions

Profile

Building Solutions develops, produces and delivers solutions in the field of efficient electro technology ranging from applications within buildings to technical systems which, linked to software, provide efficiency solutions for the care and security sectors. The know-how focuses on connectivity systems combined with efficiency solutions to reduce the throughput-time for the realisation of installations within buildings. In addition, the segment focuses on intelligent video, intercom and access monitoring systems for a number of specific sectors, including elderly care, parking and security for buildings and work sites.

(in € million unless otherwise stated) 1 st half 2010 1 st half 2009 Difference in % Turnover 160.3 134.4 + 19.3 EBITA 1) 11.1 4.7 + 136.8 ROS 1) 6.9% 3.5%

Key figures first-half year Building Solutions

1) Excluding exceptional charges in 2009

Turnover within the Building Solutions segment increased to € 160.3 million in the first half of the year. Turnover increased by 7.4% due to the effect of raw materials prices. Turnover growth was realised in a cautious market and largely on the basis of the innovations in this segment.

EBITA increased to € 11.1 million. All sub-segments booked increased results because of the increased turnover, despite the fact that cost levels were relatively high due to advance investments for product and market development. The efficiency measures introduced in 2009 made a significant contribution to the EBITA growth.

Building technologies – energy-saving light and light switch systems, energy management systems, care systems, structured cabling systems – turnover share 8.5%

Turnover was up 9.5%. The increase in turnover was driven by innovations in the field of domotica solutions and lighting systems to reduce energy use, as well as efficiency solutions for cabling systems within buildings for energy and data communication solutions. TKH increased investments in product and market development of the building technologies portfolio.

Security systems – systems for CCTV, video/audio analysis and detection, intercom, access control and registration, central control room integration – turnover share 9.9%

Turnover increased by 8.6%, despite the fact that in the first half of last year a number of large projects were delivered. Also here, TKH made considerable investments in the expansion of the commercial organisation to further increase market penetration in Europe and Asia.

Connectivity systems – specialty cable, connectivity components and systems for shipping, rail, infrastructure, solar and wind energy as well as installation and energy cable for niche markets – turnover share 19.7%

Turnover was up 30.9%. The increased raw materials prices had a positive effect of around 15% on turnover. Unlike last year, customers returned to investing in building up stocks rather than reducing stocks to enable them to respond to the shorter throughput times of projects. Strong growth was booked in infrastructure projects and cable systems for solar solutions.

Industrial Solutions

Profile

Industrial Solutions, develops, produces and delivers solutions ranging from specialty cable, plug and play cable systems to integrated systems for the production of car and truck tyres. Its knowledge in the field of automation of production processes and the improvement of the reliability of production systems gives TKH the distinctive ability to respond to the need in a number of specialised industrial sectors, such as tyre manufacturing, robotics, medical and machine construction industries, to increasingly outsource the construction of production systems or modules.

Key figures first half year Industrial Solutions

(in € millions unless otherwise stated)	st half 1 2010	st half 1 2009	Difference in %
Turnover	190.0	145.1	+ 31.0
EBITA 1)	18.3	4.2	+ 338.8
ROS 1)	9.6%	2.9%

1) Excluding exceptional charges in 2009

Turnover in the Industrial Solutions segment increased to € 190.0 million in the first half of 2010. The effect of raw materials prices raised turnover by 8.2%. There was a clear increase in the level of investments in capital goods, which led to substantial turnover growth in this segment. Innovations also made a positive contribution to growth. The high level of order intake seen in the first quarter of 2010 continued into the second quarter.

EBITA increased to € 18.3 million, partly due to the strong increase in turnover. The cuts in overhead costs and the reduction of the portfolio in the manufacturing systems subsegment, introduced in 2009, made a considerable contribution to the strong improvement in the margin.

Connectivity systems – specialty cable systems and modules for the medical, robot, automotive and machine building industries – turnover share 24.0%

Turnover in cable systems and speciality cable increased by 24.3%. The willingness to invest recovered to a large extent and the trend towards outsourcing activities in the form of complete modules and systems is once again increasing. Turnover in the robot industry and machine building sector in particular showed a strong recovery.

Manufacturing systems – advanced manufacturing systems for the production of car and truck tyres, can washers, product handling systems and machine operating systems – turnover share 21.2%

Turnover increased by 39.4%. This was largely due to the strong increase in order intake since the fourth quarter of 2009. Increased financing opportunities and a recovering end market led to increases in investments in efficiency improvements and expansion of production capacity in the tyre manufacturing industry. Asia in particular made a considerable contribution to turnover growth. Our innovative solutions boosted our market position and increased the investment priority among our clients.

Outlook

The outlook for the second half of the year for the market segments in which TKH operates is mixed.

Within Telecom Solutions, the order portfolio increased in recent months and there are signs of fewer restrictions with respect to financing for new projects in the area of optical fibre networks. Investments in the maintenance of copper telecom networks remain at a low level.

In Building Solutions, investments in the building construction sector in Europe are expected to continue to drop. However, TKH group's innovations in the field of security and energy-saving systems provide perspective for growth in market share. In addition, there are several market segments that are showing growth, including the market for infrastructure projects and the market for alternative energy generation.

In the Industrial Solutions segment, order intake is at a high level in all of the market segments in which TKH is active. The order book is well filled and capacity utilisation is showing an upward trend in the second half of the year.

The increased value of Asian currencies and higher raw materials prices will have a negative effect on the margin in the second half of the year.

On balance and barring unforeseen circumstances, TKH expects to realise a net profit before amortisation of between € 34 and € 38 million for the full year 2010.

Haaksbergen, 25 August 2010

Executive Board

For further information: J.M.A. (Alexander) van der Lof MBA, Chairman of the Executive Board tel. + 31 (0)53 5732903 website: www.tkhgroup.com

Diary of events

11 November 2010	Trading update Q3 2010
9 March 2011	Annual results 2010
4 May 2011	Trading update Q1 2011
17 May 2011	General Meeting
24 August 2011	Q2 and first half results 2011
10 November 2011	Trading update Q3 2011

Consolidated profit and loss account

In thousands of euros

	1	st half year 2010	1st half year 2009
Net turnover 1) Other operating income		420,138 478		352,724 756
Total turnover		420,616		353,480
Costs of raw materials, consumables, trade products and subcontracted work Personnel expenses	257,346 84,749		207,593 90,245
Depreciation	6,912		8,128
Amortisation	5,312		4,333
Other operating expenses	41,228		40,940
Total operating expenses 2)		395,547		351,239
Operating result		25,069		2,241
Financial income and expenses		-2,352		-5,557
Share in result of associates		24		-350
Result before tax		22,741		-3,666
Tax on profit		6,777		-1,021
Net result		15,964		-2,645
Attributable to:
Shareholders of the company		15,637		-2,764
Minority interest		327		119
		15,964		-2,645
Earnings per share Weighted average number of shares (x 1,000)		36,508		35,625
Weighted average number of shares for the purpose of diluted earnings per share (x 1,000)		37,198		35,649
Ordinary earnings per share before amortisation (in €)		0.48		-0.03
Ordinary earnings per share (in €)		0.43		-0.08
Diluted earnings per share (in €)		0.42		-0.08

1) Inclusive change in inventory of finished goods, work in progress and construction contracts of € 32.0 million (H1 2009: € -8.1 million).

2) The operating expenses in 2009 include one-off restructuring costs of € 7.2 million. These expenses are recognised in the second quarter and relate for € 6.6 million to personnel expenses. The remaining restructuring costs are recognised in other operating expenses.

Comprehensive income

	st half year 2010 1		1st half year 2009
Result for the period (ended 30 June)		15,964		-2,645
Currency translation differences Effective portion of changes in fair value of cash flow	4,495		-325
hedges (after tax)	-1,979		-1,444
Revaluation of property	0		-49
Net income and expense recognized directly in equity		2,516		-1,818
Total result for the period		18,480		-4,463
Attributable to:
Shareholders of the company		18,153		-4,582
Minority interest		327		119
Total result for the period		18,480		-4,463

Consolidated balance sheet

	30-06-2010		31-12-2009
Assets
Non-current assets
Intangible non-current assets	168,183		167,273
Tangible non-current assets	148,605		147,929
Investment property	3,404		3,334
Financial non-current assets	2,302		2,112
Deferred tax assets	8,140		7,858
Total non-current assets		330,634		328,506
Current assets
Inventories	137,659		114,957
Receivables	188,364		146,263
Cash and cash equivalents	10,964		43,554
Total current assets		336,987		304,774
Assets held for sale		9,050		8,850
Total assets		676,671		642,130
Equity and liabilities
Group equity
Shareholders' equity	288,970		280,536
Minority interest	1,548		1,324
Total group equity		290,518		281,860
Non-current liabilities
Non-current liabilities	84,500		72,000
Deferred tax liabilities	29,212		29,968
Provision for pensions	11,920		12,613
Other provisions	8,689		8,668
Total non-current liabilities		134,321		123,249
Current liabilities
Borrowings	21,261		40,944
Trade and other payables	217,432		179,866
Current income tax liabilities	8,176		3,483
Provisions Total current liabilities	4,963	251,832	12,728	237,021
Total equity and liabilities		676,671		642,130

Consolidated cash flow statement

	st half 1 year 2010	st half 1 year 2009
Cash flow from operating activities
Operating result	25,069	2,241
Depreciation and amortisation	12,224	12,424
Share and option schemes not resulting in a cash flow	601	548
(Gain)/loss on sale or disposal of tangible assets	576	37
Changes in provisions	-4,369	-635
Changes in working capital	-29,893	62,090
Cash flow from operations	4,208	76,705
Interest paid	-3,560	-4,527
Income tax paid	-2,445	-6,241
Net cash flow from operating activities (A)	-1,797	65,937
Cash flow from investing activities
Dividends received from non-consolidated associates	0	9
Investments less disposals in tangible non-current assets and
assets held-for-sale	-5,031	-4,002
Result on investments and disposals of investment property	-70	201
Disposals of assets held for sale Acquisition of subsidiaries	78 -6,514	0 0
Acquisition of associates	0	0
Investments in other intangible non-current assets	-2,608	-3,793
Net cash flow from investing activities (B)	-14,145	-7,585
Cash flow from financing activities
Dividends paid	-9,994	-13,970
Sold less purchased shares for share and option schemes Proceeds from long-term debts	-404 12,500	-118 23
Change in borrowings	-19,683	-43,576
Net cash flow from financing activities (C )	-17,581	-57,641
Net decrease in cash and cash equivalents (A+B+C)	-33,523	711
Exchange differences	933	-723
Change in cash and cash equivalents	-32,590	-12
Cash and cash equivalents at 1 January	43,554	9,519
Cash and cash equivalents at 30 June	10,964	9,507

Consolidated statement of changes in group equity

	Sh are ca pita l	Sh are pr em ium	Leg al r ese rve	Re val res uat erv ion e	Tra nsl res atio erv e n	hed ge Ca res sh- erv flow e	Oth er res erv e	Un app rop riat pro ed fit	Tot al	Min orit y in ter est	Tot al e qui ty
Balance as at 1 January 2009	9,017	12,683	9,728	23,452	4,045	-6,180	189,725	49,934	292,404	1,089	293,493
Profit in financial year							-2,764		-2,764	119	-2,645
Reclassification of put options held by minority shareholders Changes cash-flow hedges Revaluation of property Exchange differences			663	-49	-325	-1,444	-663		0 -1,444 -49 -325		0 -1,444 -49 -325
Total result	0	0	663	-49	-325	-1,444	-3,427	0	-4,582	119	-4,463
Appropriation profit last year Dividends Dividends to minority shareholders	239	-239					36,048	-36,048 -13,886	0 -13,886 0	-84	0 -13,886 -84
Share and option schemes (IFRS 2)							548		548		548
Purchased shares for share and option schemes Sold shares for share and option							-612		-612		-612
schemes							494		494		494
Capitalised development costs Balance at 30 June 2009	9,256	12,444	1,523 11,914	23,403	3,720	-7,624	-1,523 221,253	0	0 274,366	1,124	0 275,490
Balance at 1 January 2010	9,256	12,444	13,668	23,770	3,640	-6,826	221,932	2,652	280,536	1,324	281,860
Profit in financial year Reclassification of put options held by								15,637	15,637	327	15,964
minority shareholders			199				-199		0		0
Change in cash-flow hedges Exchange differences					4,446	-1,979			-1,979 4,446	49	-1,979 4,495
Total result	0	0	199	0	4,446	-1,979	-199	15,637	18,104	376	18,480
Appropriate profit last year Dividends Dividends to minority shareholders	139	-139					-7,190	-2,652	0 -9,842 0	-152	0 -9,842 -152
Share and option schemes (IFRS 2) Purchased shares for share and option							576		576		576
schemes Sold shares for share and option							-1,667		-1,667		-1,667
schemes							1,263		1,263		1,263
Capitalised development costs Balance at 30 Juni 2010	9,395	12,305	-224 13,643	23,770	8,086	-8,805	224 214,939	15,637	0 288,970	1,548	0 290,518

Notes to the interim financial report

1. Accounting principles for financial reporting.

The interim financial report has been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2009. The accounting principles applied for the valuation of assets and liabilities and the determination of result are the same as those applied in the consolidated financial statements as at and for the year ended 31 December 2009.

2. Judgements

The preparation of the condensed consolidated interim financial statements 2010 requires from management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2009.

3. Statutory capital

The number of outstanding (depositary receipts of) shares as per 31 December 2009 was the equivalent of 36,297,200. As a result of the exercise of options rights and share schemes, a balance of 39,047 (depositary receipts of) shares were delivered and sold in the first half of 2010. In addition, a stock dividend of 555,648 (depositary receipts of) shares was paid out from the share premium reserve. As a result, the number of (depositary receipts of) shares outstanding with third parties as per 30 June 2010 was 36,891,895.

4. Dividend

At the General Meeting of Shareholders the dividend over 2009 was declared at € 0.50 per (depositary receipt of) ordinary share. The dividend was proposed at the option of shareholders in cash or as a stock dividend. The dividend on the priority shares was declared at € 0.05 per share. The total amount in dividends paid in the first half of 2010 was € 9,842,347 and this amount was charged to the other reserves. For stock dividend an amount of € 138,912 was charged against the share premium reserve.

5. Segmented information

	Telecom Solutions		Building Solutions		Industrial Solutions		Not attributable		Total
	st half 1 year 2010	st half 1 year 2009	1st half year 2010	1st half year 2009	1st half year 2010	1st half year 2009	1st half year 2010	1st half year 2009	1st half year 2010	1st half year 2009
Turnover	70,264	74,041	160,341	134,352	190,010	145,087	0	0	420,615	353,480
EBITA excl. exceptional losses	5,374	8,803	11,076	4,676	18,309	4,173	-4,379	-3,841	30,380	13,811
Exceptional gains and losses	0	-743	0	-748	0	-5,746	0	0	0	-7,237
Segment EBITA	5,374	8,060	11,076	3,928	18,309	-1,573	-4,379	-3,841	30,380	6,574
Amortisation	-443	-384	-3,000	-2,098	-1,862	-1,851	-7	0	-5,312	-4,333
Segment operating result	4,931	7,676	8,076	1,830	16,447	-3,424	-4,386	-3,841	25,068	2,241
Financial income and expenses									-2,352	-5,557
Share of result of associates									24	-350
Tax on profit									-6,777	1,021
Net result									15,963	-2,645

6. Overview of net profit definitions

In thousands of euros	st half 1	st half 1
	year	year
	2010	2009
Net profit attributable to shareholders of the company	15,637	-2,764
Net profit attributable to minority shareholders	327	119
Net profit	15,964	-2,645
Amortisation of acquisition-related intangible assets based on "purchase price
allocations"	2,828	2,716
Taxes on the amortisation	-872	-844
Net profit before amortisation	17,920	-773
Attributable to minority interest	-327	-119
Ordinary earnings before amortisation attributable to shareholders of the
company	17,593	-892
Net profit before amortisation	17,920	-773
Exceptional charges	0	7,237
Taxes on exceptional charges	0	-2,026
Net profit before amortisation and exceptional charges	17,920	4,438

7. Acquisitions

During the first half of 2010 TKH has not made any material acquisitions.

8. Contingent liabilities

The contingent liabilities which are not reflected in the balance sheet, as reported in the financial statements for 2009, have not essentially changed in the first half of 2010.

9. Events after balance sheet date

On 1 July 2010 TKH has acquired 100% of the shares of Alphatronics B.V. Except for the acquisition mentioned before, no events took place after the balance sheet date that significantly impact the insight into the recent most recent interim period.

10. Risks

In our Annual Report 2009 we have extensively described certain risk categories and risk factors which could have an (adverse) impact on our financial position and results. Those risk categories and risk factors are still applicable.

11. Executive Board declaration

This report contains the semi-annual financial report of TKH Group NV. The semi-annual financial report ended 30 June 2010 consists of the condensed consolidated semi-annual financial statements, the semi-annual director's report and Executive Board declaration. The information in this semi-annual financial report is unaudited. The condensed consolidated semi-annual financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the consolidated financial statements of TKH for the year ended 31 December 2009.

The Executive Board hereby declares that to the best of their knowledge, the semi-annual financial statements, which have been prepared in accordance with lAS 34 Interim Financial Reporting, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole, and the semi-annual director's report gives a fair review of the information required pursuant to section 5:25d(8)/(9) of the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

12. Signature of interim report

Haaksbergen, 24 August 2010

Executive Board J.M.A. van der Lof MBA, chairman E.D.H. de Lange MBA

The figures in the interim financial report have not been audited.