Masterflex SE — Interim / Quarterly Report 2003

May 19, 2003

Interim report as of March 31, 2003

■ Revenue growth:	+ 12.1%
■ EBIT	+ 35.9%
■ Net profit	+ 110.5%

■ Outlook for 2003 as a whole: Product drive to provide basis for further growth

Q1 confirms that the forecasts for the year as a whole (revenue +11%, EBIT +21% - 29%) are based on conservative assumptions

QUARTERLY REPORT 1/2003

	2003	2002	in %
Revenue (z thou.)	15,375	13,719	12.1%
EBITDA (z thou.)	1,937	1.535	26.2%
EBIT (z thou.)	1,301	957	35.9%
EBT (z thou.)	1,007	758	32.8%
Net profit (z thou.)	501	238	110.5%
Earnings per share (z)	0.12	0.05	140.0%
Number of employees	344	338	1.8%

March,31 March,31 Change

25,983
57,378
45.0%
	-2.7% 2.7%

Revenue

Dear Shareholders,

Our successful development of 2002 has been repeated and reinforced in Q1 2003. Despite the continuing difficult economic environment, Masterflex AG increased its consolidated revenue by 12.1% year-on-year to z15.4 million.

Developments in the Group's earnings situation were even more encouraging.

Earnings before interest, taxes, depreciation and amortization (EBITDA) in Q1 2003 rose by 26.2% year-on-year to z1.9 million. Group earnings before interest and taxes (EBIT) rose even more sharply by 35.9% to z1.3 million, clearly demonstrating the success of our investments in recent years.

After having already risen by an encouraging 25% as of December 31, 2002, net profit practically exploded in Q1, shooting up by 110.5% year-on year to z0.5 million (2002: z0.2 million). As a result, ear-

nings per share improved by 140%, rising to z0.12 (Q1 2002: z0.05).

This encouraging development, coupled with the start of our product drive in the medical technology field, makes us extremely optimistic about achieving our revenue and profit targets for the year as a whole.

Income statement

Our income statement shows that our costs did not grow in proportion to revenue. This is reflected in our virtually unchanged material consumption ratio of 49% (Q1 2002: 48%), among other things.

The same is also true for our staff costs, which rose by 7.6% year-on-year to z3.5 million.The number of employees increased by 1.8%, from 338 to 344. At 23%, however, the staff costs ratio declined slightly as against Q1 2002 (2002: 24%).

Depreciation and amortization expense rose as a result of investments in noncurrent assets; goodwill amortization remained constant.

Net profit from ordinary activities (EBT) improved by 32.8% in Q1 2003, rising to z1.0 million (previous year: z0.8 million).A disproportionate increase in profits at the foreign subsidiaries resulted in an improved overall tax result.

Change in individual balance sheet items

There were no material changes in noncurrent assets. The rise in receivables, particularly trade receivables, primarily relates to our subsidiary

DICOTA GmbH, which granted major corporate clients an extension on their payment periods. Similarly, there were no significant changes on the equity and liabilities side. Additional provisions were set up for expected tax payments in the coming quarters.At z58.9 million, total assets were up 2.7% year-on-year (Q1 2002: z57.4 million). The equity ratio sank 2.7% as against the prior-year period, but remains a very solid 43%.

High-tech hose systems still main revenue drivers

Our core business unit, high-tech hose systems, continues to be a key contributor to our revenue and earnings increases. Although this unit has also felt the effects of the tight market situation, its broad positioning in over 20 sectors allows us to cope with economic downturns better than can companies dependent on one sector.

In line with planning, business in the USA developed positively and, according to our current estimates, will become considerably more important in the coming years. The traditional air conditioning and ventilation business is already established and provides a solid basis for further continuous earnings contributions in the USA.

Thanks to new products and the ongoing substitution of PVC, rubber and steel by polyurethane, we are forecasting continuing positive developments for our high-tech hose systems in 2003.

Product drive in medical technology

The cost-cutting angiography kits provided by our medical technology unit allow us to benefit from the trend in the healthcare sector towards reducing costs. In addition, polyurethane is playing an increasingly significant role in medical technology. In recent years, we have made substantial investments in this area - investments that will lead to new products in the current year. Our product drive is being led by our internationally patented LaryVent respiratory mask. Experts consider that this product has the potential to become the world market leader. Our customized sets also offer doctors and hospitals

cost-saving potential and a reliable basis for calculation. Thanks to this portfolio of innovative products, we expect this business unit to contribute substantially to revenue and earnings in the years to come.

Prospects in the fuel cell technology segment

In the short to medium term, Masterflex's growth drivers will undoubtedly come from its two established business units. However, our newest business unit - fuel cell technology - also provides real potential for future growth. Here, too, we aim to achieve an extremely strong position in the international arena with our innovative technologies and products.

In spring 2003, we exhibited our near-series prototype of a hydrogen-based 50-watt fuel cell - a mobile power supply - at CEBIT and the Hanover Messe trade fair. We hope to begin series

production from 2004 onwards. With the help of leading research institutes, we hope to generate a decisive impetus for this innovative technology in the coming years.

From 2004 onwards, this fuel cell will be installed in the carrying systems of our subsidiary DICOTA GmbH, as a mobile energy supply for notebooks, printers, and cellular phones. Even though the focus of DICOTA's core business activities for mobile office computing is on H2, developments in Q1 2003 were promising. Early in the year, the company presented its new products at the CEBIT fair in Hanover.

Comprehensive segment reporting will be included in future quarterly reports.This was not possible for Q1 due to the comprehensive structure of the consolidated Group.

Investor relations and share price

As of March 24, 2003, a new index structure comprising the Prime Standard and the General Standard applies on the German Stock Exchange. Masterflex has been admitted to the Prime Standard.The Company has met the strict reporting requirements of the Prime Standard, including accounting in accordance with the IFRSs or US

GAAP, since its IPO in 2000. Masterflex is currently represented in the following indices: CDAX, Prime All Share, Classic All Share and Prime Industrial.

In view of current stock market conditions, Masterflex's share price (ISIN DE0005492938, WKN 549293, exchange symbol mzx) performed satisfactorily in Q1 2003. Following the publication of our positive results for fiscal 2002 and our upbeat outlook for 2003, we are hoping to see a sustained improvement in the price of our shares. We will continue to seek contact with potential investors. Our new-look homepage, which we expect to have completed by the end of May, will offer even easier access to information on our Company to private investors as well.

We announced our figures for 2002 at the financials press conference on April 25, 2003, and the DVFA analyst conference followed on April 28, 2003. A large number of discussions with investors and roadshows are also planned for this year, in order to present Masterflex AG's successful business model.

Dividend proposal of z 0.40 per share

We intend to continue to enable our shareholders to share in the successful development of our Company. The Board will therefore again recommend a dividend payment this year in the amount of z0.40 per share at the Annual General Meeting of Masterflex AG.The Annual General Meeting will take place in Schloss Horst in Gelsenkirchen on June 18, 2003 at 11.00 a.m. Invitations will be sent out to our shareholders in May.

Outlook

Our highly versatile material polyurethane, our technological expertise and our innovative business units provide the ideal basis for dynamic revenue and earnings growth. Masterflex AG is excellently positioned as a result of its innovative and highly profitable products.The investments made over the past few years and this year's medical technology product drive are setting the stage for further growth.

Q1 2003 has confirmed that our forecasts for the year as a whole are based on conservative assumptions. In fiscal 2003, we are expecting revenue to rise by around 11% and EBIT by between 21% and 29%. Our current guidance also sees a highly disproportionate development in net profit.

May 2003

Detlef Herzog Chairmann of the Board

Hiltrud Mütherich Board Member

ASSETS	March 31, 03*	Dec. 31, 02
	z thou.	z thou.
NONCURRENT ASSETS
Intangible assets
Concessions, industrial and similar rights
and assets, licenses	524	404
Development costs	724	712
Goodwill	16,447	16,685
Advance payments	0	137
Property, plant and equipment Land, land rights and buildings including
buildings on third-party land	7,860	7,967
Plant and machinery	4,837	4,939
Other equipment, operating and
office equipment	1,053	1,064
Advance payments and assets
under development	1,343	819
Long-term investments
Investment securities	640	734
Other loans	178	161
CURRENT ASSETS
Inventories
Raw materials and consumables used	3,631	3,576
Finished goods and goods purchased
and held for resale	6,565	6,272
Advance payments	223	172
Trade accounts and notes receivable
Trade receivables	11,146	10,275
Receivables from shareholders	0	0
Other assets	1,513	1,710
Marketable securities
Other securities	0	0
Cash and bank balances	1,679	2,671
DEFERRED TAX ASSETS	418	376
PREPAID EXPENSES	136	129
TOTAL ASSETS	58,917	58,803

* Unaudited

March 31, 03* z thou.	Dec. 31, 02 z thou.
	4,353
	18,570
	3,809
-744	-650
-488	-333
25,274	25,749
1,612	1,699
	1,344
1,506	1,125
	14,532
19	2
4,476	4,432
167	598
6,709	6,786
442	438
2,090	2,098
58,917	58,803
	4,312 17,973 4,221 1,472 15,150

* Unaudited

Financial statements as of		March 31, 03 March 31, 02
	z thou.	z thou.
Revenue	15,375	13,719
Changes in inventories of finished
goods and work in progress	130	79
Work performed by the enterprise
and capitalized	46	75
Other operating income	141	239
Gross revenue	15,692	14,112
Cost of materials	-7,540	-6,637
Staff costs	-3,511	-3,262
Depreciation and amortization expense	-636	-578
Other operating expenses	-2,704	-2,678
Total operating expenses	-14,391	-13,155
Income from investments	5	6
Other interest and similar income	6	26
Interest and similar expenses	-305	-231
Net profit from ordinary activities	1,007	758
Income tax expense	-345	-463
Deferred taxes	-76	27
Other taxes	-56	-67
Income attributable to minority interest	-29	-17
Net profit for the period	501	238

	z thou.	z thou.
Net profit for the period	501	238
Depreciation and amortization expense	636	578
Change in provisions	479	37
Other non-cash expenses/income and gain/loss
on disposal of noncurrent assets	-24	-57
Changes in inventories, trade receivables
and other assets	-1,122	-2,139
Changes in trade payables and other
equity and liabilities	-484	704
Amounts paid out for extraordinary items	0	0
Net cash from/used in operating activities	-14	-639
Proceeds from asset disposals	7	21
Purchase of noncurrent assets	-668	-801
Changes in cash and cash equivalents due to
the acquisition of consolidated subsidiaries	0	0
Net cash from/used in investing activities	-661	-780
Proceeds from additions to equity
(capital increases, sales of treasury shares)	0	720
Dividends paid to owners and minority interests
(dividends, acquisition of treasury shares)	-754	-1,922
Proceeds from finance facilities raised	1,466	819
Repayment of borrowings	-828	-261
Net cash from/used in financing activities	-116	-644
Net change in cash and cash equivalents	-791	-2,063
Changes in cash and cash equivalents due to
exchange rates and other factors	-201	-28
Cash and cash equivalents at beginning
of period	2,671	4,404
Cash and cash equivalents at end of period	1,679	2,313

Financial statements as of March 31, 03* March 31, 02*

* Unaudited * Unaudited

Consolidated statement of changes in equity

	Issued capital thou. z	Share premium thou. z	Retained earnings (retained profits brought forward) thou. z	Revaluation reserve thou. z	Exchange differences thou. z	Total thou. z
Equity at Dec. 31, 2001	4,446	19,729	2,996	-146	-223	26,802
Net profit	0	0	238	0	0	238
Changes in fair values of financial
instruments*	0	0	0	-32	0	-32
Currency translation gains/losses from
translation of foreign financial statements	0	0	0	-21	-21	-21
Sale of treasury shares*	40	768	0	0	0	808
Purchase of own shares	-109	-1,783	0	0	0	-1,892
Dividend distributions	0	0	0	0	0	0
Translation differences from net
investments in foreign entities*	0	0	0	0	-6	-6
Other changes	0	0	86	0	0	86
Equity at March 31, 2002	4,377	18,714	3,320	-178	-250	25,983
Equity at Dec. 31, 2002	4,353	18,570	3.809	-650	-333	25,749
Net profit	0	0	501	0	0	501
Changes in fair values of financial
instruments*	0	0	0	-94	0	-94
Currency translation gains/losses from
translation of foreign financial statements	0	0	0	0	-200	-200
Sale of treasury shares*	0	0	0	0	0	0
Purchase of own shares	-41	-597	0	0	0	-638
Dividend distributions	0	0	0	0	0	0
Translation differences from net
investments in foreign entities*	0	0	0	0	45	45
Other changes	0	0	-89	0	0	-89
Equity at March 31, 2003	4,312	17,973	4,221	-744	-488	25,274

*) net of income tax effects

Investor Relations

Stephanie Kniep Fon 02 09/9 70 77-44 Fax 02 09/9 70 77-20 E-mail: kniep@masterflex.de www.masterflex.de

Masterflex AG Willy-Brandt-Allee 300 D-45891 Gelsenkirchen

Fon 02 09/9 70 77-0 Fax 02 09/9 70 77-20

E-mail: info@masterflex.de www.masterflex.de