Masterflex SE — Interim / Quarterly Report 2005

May 30, 2005

QUARTERLY REPORT 1/2005

Investor Relations

Stephanie Kniep Fon +49(0)209/97077-44 Fax +49(0)209/97077-20 E-mail: kniep@masterflex.de www.masterflex.de

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

Fon +49(0)209/97077-0 Fax +49(0)209/97077-33

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

■ Revenue growth	+7.6 %
■ EBIT	+10.2 %
■ Net profit	+23.0 %
■ Outlook for 2005
Board confirms forecast:
Revenue	+15-20%
EBIT	+15-25%

	March 31, 2005	March 31, 2004	+/-
Revenue (a thou.)	19,215	17,851	7.6 %
EBITDA (a thou.)	2,801	2,724	2.8 %
EBIT (a thou.)	2,307	2,094	10.2 %
EBT (a thou.)	1,860	1,851	0.5 %
Net profit (a thou.)	1,283	1,043	23.0 %
IFRS-Earnings per share (a)	0.29	0.23	26.1 %
EBIT-Margin	12.0 %	11.7 %	2.6 %
Net profit margin	6.7 %	5.8 %	15.5 %
Number of employees	475	419	13.4 %
	March 31, 2005	Dec 31, 2004	+/-
Equity (a thou.)	30,225	31,968	-5.5 %
Total assets (a thou.)	82,466	83,573	-1.3 %
Equity ratio	36.7 %	38.3 %	-4.2 %

Stock development January 2005 - May 2005

Dear shareholders,

Masterflex AG successfully continued its steady revenue and earnings growth in Q1 2005. However, this development is not reflected in the year-on-year comparison due to the unusually strong first quarter in the previous year, when one-time factors led to the highest earnings growth in the Company's history. This development was also unusual given that, traditionally, growth is mainly generated in the second half of the year. However, the successful development can clearly be seen from a comparison with Q1 2003 (revenue +25.0%, EBIT +77.3%).

Consolidated revenue rose 7.6% year-on-year to EUR 19.2 million.This is due primarily to increasing contributions from the Medical Technology and Fuel Cell Technology business units. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 2.8% year-on-year in Q1 2005 to EUR 2.7 million; earnings before interest and taxes (EBIT) increased by 10.2% to EUR 2.3 million. The EBIT margin rose year-onyear to an excellent 12.0% - one of the best figures for any German listed company. Net profit rose by 23.0% to EUR 1.3 million. Earnings per share climbed as a result from EUR 0.23 to EUR 0.29 (+26.1%).

In Q1 2005, the innovative product portfolio and increasing internationalization in the High-tech Hose Systems business unit again contributed significantly to positive earnings development. In Medical Technology, the investments of the previous years are now bearing fruit. Positive earnings contributions have been generated since the end of 2004.Within the

Fuel Cell Technology business unit, the mobile office segment is experiencing extremely dynamic growth. We believe there is considerable additional potential here, which is why we acquired the remaining shares of DICOTA GmbH in February 2005. Novoplast Schlauch-

RESULTS

BUSINESS UNITS

technik GmbH is now also a 100% subsidiary.

The Board of Masterflex AG continues to see substantial growth potential, particularly with regard to new developments in the High-tech Hose Systems business area.We therefore confirm our forecasts for full-year 2005 of a growth in revenue of 15% to 20%, and an increase in EBIT of between 15% and 25%.

Income statement

The income statement as of March 31, 2005 shows that we are successfully focusing on the sale of innovative, premiumpriced products with high margins. Internationalization is also contributing to the positive development.

The ratio of cost of materials to revenue remained stable at 43.5% in Q1 2005 (previous year: 45.0 %), as did the staff costs ratio at 24.8% (previous year: 24.0%).The number of employees increased by 13.4% to 475.

The ratio of other operating expenses to revenue also remained roughly on a par with the prior-year level. The same applies to the depreciation and amortization expense which consisted primarily of depreciation and amortization of noncurrent assets.

As a result of these effects, net profit for the period (EBT) improved by 0.5% as of March 31, 2005, rising to EUR 1.86 million (previous year:EUR 1.85 million).Increasing earnings from our foreign subsidiaries in countries with low tax rates resulted in 23% growth in consolidated net profit, to EUR 1.3 million.

Changes in individual balance sheet items

Masterflex AG's net assets changed marginally as of March 31, 2005.Total assets fell by 1.3% to EUR 82.5 million.The yearon-year difference is due to a borrower's note loan of EUR 23 million that we received from IKB Deutsche Industriebank AG in summer of last year. The unused portion of this loan was invested in commercial papers in 2004 (see "Other securities" item). In February 2005, part was used to acquire the outstanding shares in DICOTA GmbH and Novoplast Schlauchtechnik GmbH. On the equity and liabilities side of the balance sheet, bank loans and overdrafts rose due to the borrower's note loan by EUR 19.1 million year-on-year.

As a result of the restructuring of the Company's equity and liabilities, the equity ratio fell year-on-year to 36.7% of total assets.

High-tech Hose Systems - continuing success

Our core business unit, High-tech Hose Systems, continued its successful development in Q1 2005. More and more customers are coming to appreciate the excellent performance and diversity of our products. Our high-performance material polyurethane is clearly superior to traditional materials such as PVC, rubber, and steel in many areas, such as abrasion resistance and weight.

We have successfully presented our product range at various German and international trade shows such as the BAUMA trade fair for construction machinery, the Hanover Fair,WIN in Turkey and INDUSTRIA in Hungary.

Our internationalization progressed as planned in Q1 2005. We will further expand our marketing and sales activities in Eastern Europe and in the USA to optimally develop these markets.We expect the North American market to play a substantially greater part in this business unit in the years to come. We will strengthen our export activities in the Asian market. For 2005, we therefore expect that the internationalization of our business will make substantial contributions to

BUSINESS UNITS

BUSINESS UNITS

revenue and earnings.

We view our innovative strength as another mainstay for dynamic growth. In Q1, we recorded successes in the development of a completely new generation of hoses.These hoses are given an inner coating with the aid of nanotechnology, which makes them impermeable to hydrogen.We believe that possible areas of application will be where stainless steel pipes are used today.The first plant is scheduled for completion in the summer and will begin production of these new hoses. This innovative coating process has been patented.

Medical Technology set-up of production and sales completed

In 2004, we turned the Medical Technology business unit around, generating a small contribution to earnings. Our goal for 2005 is to expand the contribution of this business unit to our positive development. We will expand our surgery kits business. MHC Medic Health Care GmbH was set up at the end of 2004 as a subsidiary of Angiokard Medizintechnik GmbH & Co. with the aim of establishing it as a brand for surgery kits. In Q1 2005, we laid the organizational foundations for expansion.

LaryVent, our globally patented respiratory mask, has been in the pre-marketing phase since the beginning of the year, in which it is being presented to doctors and hospitals. In addition, LaryVent is also designed for use in emergency medicine, where its excellent product qualities - ease of use and very low risk of injury - are of major significance.We expect to be able to make the first reliable statements on the product's market success at the end of the first half of 2005.

On the whole, we believe that Medical Technology offers considerable potential for the future. On the one hand, polyurethane, as a plasticizer-free alternative, is increasingly replacing problem materials in the medical sector, and can also be given antiseptic or antibacterial properties, for example. On the other, our products' reliable calculation base is in line with the trend for process orientation and process management. Economic considerations are playing an increasing role in procurement.We therefore expect substantial revenue and earnings contributions from our innovative product portfolio in the coming years.

Fuel Cell Technology a major hit at the Energy fair

We see major opportunities for our third business unit, Fuel Cell Technology. We share the experts' opinion that the breakthrough in this area will initially occur in niche markets, where the hydrogen infrastructure is being established as a stand-alone solution. This includes the market for electric bikes. Global sales of battery-powered electric bikes in 2004 already amounted to around one million units, of which around 120,000 were sold in Europe.These "pedelecs" automatically link the motor's output with the cyclist's muscle power via a force or movement sensor.The motor is therefore only activated while there is pressure on the pedals, and helps the rider by providing additional power. A first area of potential demand could be in municipalities and companies with large sites, where a self-contained infrastructure with a central filling station is possible.

A cooperation was concluded in January 2005 with Berlinbased Hawk Bikes E&M GmbH, a successful developer of specialized and customized bicycle applications. The aim of the cooperation is to develop three-wheeled cargo bikes (bikes for transporting small loads) equipped with Masterflex's fuel cells and an innovative drive concept.These cargo bikes were presented at the Hanover Fair in spring 2005, and met with an excellent response. The joint project is being co-financed by the European Regional Development Fund (ERDF) and the

State of North Rhine-Westphalia.

In general, our fuel cell projects receive political support on both a national and a European level. This will provide the basis for

INVESTOR RELATIONS

OUTLOOK

the introduction of fuel cell systems over a wide area. It was announced in March 2005 that the EU wants to give greater financial support to the production, storage and distribution of hydrogen.

In the short to medium term, our subsidiary DICOTA GmbH is driving the momentum in the area of Fuel Cell Technology. The company has positioned itself extremely successfully in the mobile office systems area in recent years. DICOTA aims to act as a sales channel in this dynamically growing market and hence promote the success of fuel cells in the future, particularly once a logistical infrastructure exists.We are expecting substantial growth potential, and therefore acquired the remaining shares of the company in February 2005.As in the other business units, the comparison with the prior-year period is distorted.The mobile office equipment segment recorded especially high growth in Q1 2004. DICOTA's business activities are normally concentrated on the end of the year.

Our forecasts take the mobile office business into account, but not fuel cell technology.We intend to spin off our operations in this area to a separate company over the course of the year.This is scheduled for H2 2005.

Investor relations and share price

Our investor relations can point to a number of successes in Q1 2005. We continued our international road show activities in February,further raising our profile.Masterflex AG also gave a presentation about itself in March at Commerzbank AG's international investor conference.

Additional research reports on Masterflex AG have appeared as a result of the Company's strong development and our increasing profile. The research house First Berlin, WestLB and Bankhaus Lampe all accompanied their coverage with buy recommendations in recent weeks. Other banks have also signaled interest, so that we expect further research reports to be published during the year.

This positive assessment of Masterflex AG was not reflected

in an increase in the Company's share price in early 2005. However, the shares' liquidity improved further on the back of the expansion of the free float at the beginning of the year.The free float currently amounts to 56.0%. DWS Luxemburg informed us at the beginning of the year that it holds 5.44% of our shares.

The goals for 2005 include the further internationalization of the investor base. Following the publication of the 2004 annual financial statements, a successful roadshow was held in Europe's financial centers from the end of April to mid-May. Additional discussions with investors and roadshows are planned for the rest of the year to increase awareness of Masterflex AG's successful business model on the capital markets.

Dividend increase of 33% planned

Since we want to continue to share our Company's successful development with our shareholders, the Board is again planning to pay a dividend. The proposal to be submitted to the Annual General Meeting provides for an increase of 33% to EUR 0.80 per share. The Annual General Meeting will take place in Schloss Horst in Gelsenkirchen (the same venue as last year) on June 8, 2005.

Outlook

The past fiscal year once again underscored Masterflex AG's successful business model. Revenue has grown every year since 1987, and we have consistently generated a profit. We are convinced that this development will continue in fiscal year 2005 - despite our slightly muted start. As previously mentioned, this is not due to economic blips or sales problems, but to one-time factors in the previous year.

We therefore reconfirm the forecast we issued in April. We base our positive estimate on our outstanding technological expertise, which has made us the recognized market leader, and our high innovative strength in our existing business units. In addition, we are establishing a new market with our fuel cell

NOTES

technology activities that has substantial long-term future potential.

As a result, we still expect revenue to rise by between 15% and 20% and EBIT by between 15% and 25% in 2005.

May 2005

Detlef Herzog Chairman of the Board

Ulrich Wantia Board member

Notes to the Quarterly Report

1.Accounting principles

This quarterly report was prepared in accordance with the International Financial Reporting Standards (IFRSs) and the International Accounting Standards (IASs) promulgated by the International Accounting Standards Board (IASB), and complies with the Company's key accounting principles as presented here.The accounting policies applied were the same as those applied in the preparation of the consolidated financial statements for the fiscal year ended December 31, 2004.

The new accounting standards from the IASB (International Accounting Standards Board) Improvements Project were applied with effect from January 1, 2005.

The main change in the Improvements Project affecting Masterflex relates to the revised IAS 1, which requires the reclassification of assets and liabilities in the balance sheet by maturity. The other changes do not have a material effect on the Group's net assets, financial position and results of operation.

2. Consolidated group

There were no changes to the consolidated group during Q1 2005 as against December 31, 2004.

3. Dividend

The Board of Masterflex AG will propose a 33% increase in the dividend as against the previous year to EUR 0.80 per share to the Annual General Meeting on June 8, 2005.

4. Segment reporting

Segment reporting is performed in accordance with IAS 14, with the primary segment reporting format being productrelated business units. Masterflex AG has three business units: High-tech Hose Systems (HTS), Medical Technology (MT), and Fuel Cell Technology (FCT).

HTS = High-Tech-Hose Systems MT = Medical Technology FCT = Fuel Cell Technology

March 31, 2005	HTS	MT	FCT	ment- aggregate	Seg- Reconci- liation	Group
	a thou.	a thou.	a thou.	a thou.	a thou.	a thou.
Revenue	8,588	4,184	6,443	19,215	0	19,215
Earnings (EBIT)	1,773	-98	908	2,583	-276	2,307
Investments in property,
plant and equipment and
intangible assets	410	136	208	754	0	754
Assets	28,534	22,531	20,235	71,300	11,166	82,466
Depreciation and
amortization	331	135	28	494	0	494
Liabilities	6,456	2,307	4,530	13,293	38,948	52,241

NOTES

CALENDAR
----------

March 31, 2004	HTS	MT	FCT	ment- aggregate	Seg- Reconci- liation	Group
	a thou.	a thou.	a thou.	a thou.	a thou.	a thou.
Revenue	8,989	3,299	5,563	17,851	0	17,851
Earnings (EBIT)	1,885	-209	864	2,540	-446	2,094
Investments in property,
plant and equipment and
intangible assets	350	85	15	450	0	450
Assets	28,489	17,487	9,539	55,515	6,986	62,501
Depreciation and
amortization	349	211	70	630	0	630
Liabilities	6,347	2,429	3,211	11,987	18,199	30,186

5. Earnings per share

In accordance with IAS 33, basic earnings per share are calculated by dividing the consolidated net profit by the weighted average of shares outstanding during the period under review. Earnings per share as of March 31, 2005 amounted to EUR 0.29 on the basis of a weighted average of 4.374.430 shares. Diluted earnings amounted to EUR 0.29. The stock option program (see page 67, section x of the 2004 Annual Report), which is taken into account in the calculation of diluted earnings per share, does not have any effect as the criteria for it have not been met.

6. Own shares

As of March 31, 2005 Masterflex AG held 154.973 own shares.There were no changes to the stock options and other subscription rights disclosed in the 2004 Annual Report during the period under review. Due to the increased number of own shares in the portfolio, equity declined slightly and now amounts to 36.7%.

7. Employees

At 475, the number of employees as of March 31, 2005 was up 13.4% on the prior-year period (419 employees).

March 2005

March 10-16, CEBIT (exhibitor: Dicota GmbH)

March 17-20,WIN Istanbul (exhibitor: Masterflex AG)

April 2005

April 11-15, Hannover fair (exhibitor: Masterflex AG, Novoplast Schlauchtechnik GmbH, Masterflex Brennstoffzellentechnik)

April 27,Annual Press Conference, presentation of the annual report 2004, Düsseldorf

April 28, DVFA-Analyst-Meeting, Frankfurt

May 2005

International road show

Quarterly report I/2005

May 24-27, Industria Budapest (exhibitor: Masterflex AG, Novoplast Schlauchtechnik GmbH)

June 2005

June 8, Annual General Meeting, Gelsenkirchen

August 2005 Quarterly report 2/2005

October 2005

11-13, Powtech Nuremberg (exhibitor: Masterflex AG)

November 2005

Eigenkapitalforum Frankfurt Quarterly report 3/2005

BALANCE SHEET - IFRS

BALANCE SHEET - IFRS

ASSETS	Mar.31,2005*	Dec. 31,2004
	Ta	Ta
NONCURRENT ASSETS
Intangible assets	25,982	17,946
Property, plant and equipment	18,902	18,612
Long-term investments	1,006	2,391
Deferred tax assets	322	394
	46,212	39,343
CURRENT ASSETS
Inventories	15,502	13,804
Prepaid expences	857	639
Trade accounts and notes receivable	10,507	12,189
Securities	3,101	9,500
Cash and bank balances	6,287	8,098
	36,254	44,230
Total assets	82,466	83,573

* Unaudited

EQUITY AND LIABILITIES	Mar.31.2005* Dec. 31,2004 Ta	Ta
SHAREHOLDERS´ EQUITY
Consolidated equity	29,405	29,639
Minority interest	820	2,329
Total equity	30,225	31,968
NONCURRENT LIABILITIES
Provisions	301	292
Financial liabilities	28,526	29,839
Deferred income	2,839	2,849
Other noncurrent liabilities	3,217	3,280
Deferred tax liabilities	2,113	2,194
	36,996	38,454
CURRENT LIABILITIES
Provisions	3,946	4,419
Financial liabilities	2,417	1,326
Other current liabilities	8,882	7,406
	15,245	13,151
Total equity and liabilities	82,466	83,573

* Unaudited

INCOME STATEMENT - IFRS

CASH-FLOW - IFRS

Financial statement as of	Jan.-March, 05* a thou.	Jan.-March, 04* a thou.
Revenue	19,215	17,851
Changes in inventories of finished goods and work in progress	-86	115
Work performed by the enterprise
and capitalized	61	42
Other operating income	510	111
Gross revenue	19,700	18,119
Cost of materials	-8,330	-8,024
Staff costs	-4,767	-4,306
Depreciation and amortization expense	-494	-630
Other operating expenses	-3,802	-3,065
Total operating expenses	-17,393	-16,025
Income from investments	8	7
Other interest and similar income	215	22
Write-downs of current financial instruments	-160	0
Interest and similar expenses	-510	-272
Profit before taxes	1,860	1,851
Income tax expense	-568	-609
Deferred taxes	73	-92
Other taxes	-55	-51
Income attributable to minority
interests	-27	-56
Net profit for the period	1,283	1,043

* Unaudited

Financial statement as of	Mar. 31,2005*	Mar. 31,2004*
	a thou.	a thou.
Net profit for the period	1,099	1,043
Depreciation and amortization
expense	494	630
Change in provisions	-399	50
Other non-cash expenses/income
and gain/loss on disposal of non
current assets	-38	11
Changes in inventories, trade
receivables and other assets	275	-1,614
Changes in trade payables and other
equity and liabilities	1,376	2,381
Net cash from/used in operating
activities	2,807	2,501
Proceeds from asset disposals	1,372	32
Payments to acquire noncurrent assets	-754	-693
Payments to acquire consolidated
subsidiaries	-8,324	0
Net cash used in investing
activities	-7,706	-661
Proceeds from additions to equity
(capital increases, sales of treasury
shares)	0	43
Dividends paid to owners and
minority interests (dividends,
acquisition of treasury shares)	-3,252	-374
Proceeds from securities /
term deposits	6,399	0
Proceeds from finance facilities raised	1,091	76
Repayment of borrowings	-1,379	-1,655
Net cash from/used in financing
activities	2,859	-1,910
Net change in cash and cash
equivalents	-2,040	-70
Changes in cash and cash equivalents
due to exchange rates and other
factors	229	374
Cash and cash equivalents at
beginning of period	8,098	3,594
Cash and cash equivalents at
end of period	6,287	3,898

* Unaudited

CHANGES IN EQUITY CHANGES IN EQUITY

Consolidated statement of changes in equity

	Issued capital	Share premium	Retained earnings (retained profits brought forward)	Revaluation reserve of financial instruments	Exchange differences	Total
	a thou.	a thou.	a thou.	a thou.	a thou.	a thou.
Equity at December 31, 2003	4,498	20,663	5,625	-559	-1,035	29,192
Net profit	0	0	1,043	0	0	1,043
Changes in fair values of financial instruments	0	0	0	-29	0	-29
Currency translation gains/losses from translation of foreign financial statements	0	0	0	0	362	362
Sale of treasury shares	2	41	0	0	0	43
Purchase of own shares	-11	-222	0	0	0	-233
Dividend distributions	0	0	0	0	0	0
Translation differences from net investments in foreign entities*	0	0	0	0	12	12
Other changes	0	0	40	0	0	40
Equity at March 31, 2004	4,489	20,482	6,708	-588	-661	30,430
Equity at December 31, 2004	4,411	18,519	8,960	-671	-1,580	29,639
Net profit	0	0	1,283	0	0	1,283
Changes in fair values of financial instruments	0	0	0	-16	0	-16
Currency translation gains/losses from translation
of foreign financial statements	0	0	0	0	229	229
Sale of treasury shares	0	0	0	0	0	0
Purchase of own shares	-66	-1,650	0	0	0	-1,716
Dividend distributions	0	0	0	0	0	0
Translation differences from net investments in
foreign entities*	0	0	0	0	0	0
Other changes	0	0	-14	0	0	-14
Equity at March 31, 2005	4,345	16,869	10,229	-687	-1,351	29,405

*net of income tax effects