PVA TePla AG — Interim / Quarterly Report 2003

May 27, 2003

INTERMEDIATE REPORT 1 January to 31 March 2003

BE EQUIPPED FOR TOMORROW'S MATERIALS

Foreword by the Management Board

Dear PVA TePla shareholders,

In our 2002 Annual Report we introduced you to the "new" PVA TePla AG which was formed by the merger of PVA Vakuum-Anlagenbau GmbH ("PVA") with TePla AG ("TePla") in November 2002.

With its three divisions: vacuum systems, crystal growing systems and plasma systems, PVA TePla AG has a much broader basis compared to the former TePla as far as technologies, markets, customers as well as the number of group companies and employees is concerned. Staying "lean" and remaining as flexible as a mid-sized firm despite our company's size and stock market listing is our paramount goal to achieve success.

The business climate is as difficult worldwide now as before. This is reflected in our first quarterly report of PVA TePla AG. In the first three months of the year 2003, the Group generated revenues of € 8.4 million (previous year € 10.7 million). Due to the merger, a year-on-year comparison has only limited informative value. As no quarter figures were ascertained for PVA last year, last year's pro-forma figures have been taken from the quarter figures disclosed by TePla at the time and the full year figures for PVA divided by four and then compared with actual figures for 2003 in the profit and loss account.

High demands are placed on the Management and every employee to reach the set goals, consistently implement the restructuring measures started in December 2002 and, if necessary, to adjust these to cater for new developments. As a result, this is leading to further burdens in the first half of the year, as evident in the first quarter. Although earnings before interest and taxes (EBIT) improved by 19% compared to the previous year, they are still negative at € 1.8 million. However, in the course of the year fixed costs will continue to decrease and we are still expecting to reach a break-even in the operating result for the Group.

We are on the right path. It is pleasing to note the clear improvement of the plasma systems division (formerly TePla) due to our restructuring measures after the long loss-making period. Positive stimulus in this respect also comes from US business.

The "wind of change" in the company has become clearly noticeable after the substitutions on the Management Board. We are getting to grips with changes. The new corporate group and its employees grew together within a very brief period and are willing to master common tasks and goals with a high degree of commitment. We all extend our sincere thanks to our loyal shareholders. We will make every effort to ensure that there is a sustained improvement in the company's value as a going concern.

Peter Abel Chairman of the Management Board 04

Report on Business Development

le Sa s t M ch 3 1 , 2 00 3 as a ar	/0 I 3 EU R' 00 0	/0 I 2 EU R' 00 0	Ch an ge %
Va S te cu um ys m s	3 ,5 64	5 ,5 40	-3 5. 7
l G Cr ta in S te ys ro g ys m s w	1 ,4 89	2 ,8 65	-4 8. 0
Pla S te sm a ys m s	3 ,3 05	2 ,2 63	+4 6. 0
To ta l	8 ,3 58	10 ,6 68	-2 1. 7
Ge Lo tio ca n rm an y	6 ,7 74	9 ,2 40	-2 6. 7
Lo tio US A ca n	1 ,3 70	1 ,3 94	+/ - 0 .0
Lo tio Fr ca n an ce	21 4	34	+5 29 .4

PVA TePla starts off into the 2003 financial year as a "merged company"

In the light of the difficult, recessionary environment, in particular a continued reluctance to invest in longterm assets in the semiconductor industry and the postponement of expected large-scale projects, sales revenues of PVA TePla AG have developed satisfactorily. In the first three months of the 2003 financial year, the Group achieved revenues of € 8.4 million (previous year € 10.7 million).

The vacuum systems and plasma systems divisions posted the largest share in revenues at € 3.6 million (previous year € 5.6 million) and € 3.3 million (previous year € 2.3 million); the crystal growing systems division contributed € 1.5 million (previous year € 2.8 million) to Group sales. As mentioned at the outset, last year's figures for the vacuum and crystal growing systems divisions are full year figures divided by four, so they do not reflect fluctuations in plant engineering during the year.

At € 6.8 million the largest share in sales revenues was generated at sites in Germany – clearly ahead of sites in the USA at € 1.4 million and France at € 0.2 million.

The wholly-owned subsidiary Vakuum-Anlagen Service GmbH ("VAS"), Hanau which, as a part of the vacuum systems division, generated a net loss of € 0.6 million with sales of € 1.8 million in the 2002 financial year, left the group of consolidated companies in the first quarter of 2003. The company, which was intended to be de-invested as a non-strategic subsidiary in the course of restructuring, filed an insolvency petition in February 2003, driven by its high pension liabilities. Insolvency proceedings were opened on April 25, 2003. Adjusted by the VAS, the change in revenues generated by the vacuum systems division is around 6 percent lower compared to the previous year.

Result

Result in line with expectations

The development of the operating result in the Group was essentially in line with our expectations.

Despite the lower sales revenues compared to last year, the gross operating result increased to € 2.6 million (previous year € 1.7 million). This means that the gross margin amounted to around 31 percent (previous year 15.6%).

The increased sales costs of € 2.0 million (previous year € 1.5 million) are mainly attributed to sales commission for orders affecting revenues last year. While expenses for research and development at € 0.7 million remained at last year's level, administrative costs decreased to € 1.5 million (previous year € 1.7 million).

Costs of € 0.1 million were incurred for the implementation of restructuring measures in the first quarter.

Compared to last year the operating result improved in the first quarter to € –1.8 million (previous year € -2.2 million), the operating result from ordinary business activities to € –1.9 million (previous year € -2.3 million).

In addition, the net loss for the quarter of around € 0.7 million (previous year net loss € 1.7 million) is affected by taxes on corporate income and business profits (€ -0.3 million), the capitalization of deferred taxes required by US-GAAP of around € 1.1 million and an extraordinary income of € 0.4 million from the VAS deconsolidation.

US-GAAP earnings per share stands at € -0.03 for the first quarter of 2003.

Co ol id at ed I ns nc om e St t* at em en (U S- GA AP )	I /2 00 3 R' 00 0 EU	I /2 00 2 fo pr o rm a R' 00 0 EU
Re ve nu es	8 ,3 58	10 ,6 68
Co f od ld st o go s so	-5 ,7 56	-9 ,0 06
of Gr it os s pr	2 ,6 02	1 ,6 62
Se llin g ex pe ns es	,9 93 -1	86 -1 ,4
Ge l a dm in ist tiv ne ra ra e ex pe ns es	-1 ,4 81	-1 ,7 20
ch nd d el Re t e se ar a ev op m en xp en se s	-7 04	-6 66
Re in d he st ct ot ru ur g an r rri no n- re cu ng e xp en se s	19 -1	0 -5
Am tiz io of dw ill at or n g oo	0	-3
he Ot tin r o pe ra g ex pe ns es d in an co m e	-1 25	19
O ti ul t pe ra ng r es	,8 20 -1	-2 ,2 44
In in / te st re co m e ex pe ns es	-7 3	-4 7
los of ed E it in iat qu se s a ss oc y ni co m pa es	-1 0	-1 3
in in d Ne t te st re co m e an in fr ia d t te ne co m e om a ss oc ni co m pa es	-8 3	-6 0
lt fr rd in tiv iti Re su om o ar y ac es	-1 ,9 03	-2 ,3 04
In ta co m e x	-3 26	17
fe d De ta rre x	1 ,0 61	58 3
di in Ex tra or na ry co m e	43 8	0
In fro he ha in t co m e m c ng e tin ho ds et ac co un g m	0	5
t l fo he Ne r t os s ea y r	-7 30	-1 ,6 99
Mi rit int t no y er es	75	-1 5
Ne t l fo he fte r t os s y ea r a r in it in te st m or y re	-6 55	-1 ,7 14
in ha ( ba sic ) Ea rn gs p er s re	-0 .0 3
Ea in ha ( di lut ed ) rn gs p er s re	-0 .0 3
gh d sh W ei te av er ag e ar es nd (b ) ts ta in ic ou g as	21 ,4 49 ,9 88
gh d sh W ei te av er ag e ar es nd (d ilu d ) ts ta in te ou g	88 21 ,4 49 ,9

* unaudited

Workforce / R&D

Clear reduction in number of employees

On the cutoff date of March 31, 2003 PVA TePla Group employed 304 people: 267 of whom in Germany, 34 in the USA and 3 in France. This represents a decrease in the number of employees by 43 (12%) from 347 compared to the end of 2002. More than half of this reduction was due to the deconsolidation of Vakuum-Anlagen Service GmbH and the rest by the implementation of the restructuring program.

Research and development at a constant level

At € 0.7 million R&D costs have remained constant compared to the same period last year and are apportioned to the crystal growing systems and plasma systems divisions, as last year. In this connection the plasma systems division recorded about 28% lower expenses at € 329 thousand in a year-on-year comparison (previous year € 454 thousand) with the crystal growing systems division posting a clear rise in expenses at € 378 thousand (previous year € 212 thousand). In the vacuum systems division development work is usually only carried out on the basis of a customer's order and is therefore not shown separately as R&D costs.

Further development in the vacuum systems division focused on vacuum high-temperature applications for special hard metal materials for which the capacity of resistance to wear is particularly important. Tests on the debindering of new plasticization materials also served to extend and strengthen market leadership in vacuum sintering systems.

In the crystal growing systems division the development of a VGF system (Vertical Gradient Freece) to grow high-grade GaAs and InP crystals is well underway. The project carried out in cooperation with the University of Erlangen is to expand the range of products in the compound semiconductor segment and lead to less dependence on business cycles. The first prototype was recently presented to potential customers.

Attention is focused on the expansion of solar activities in a process control system for the production of solar cells under the leadership of RWE-Schott Solar. The completion and testing at Wacker of a project subsidized by the BMBF on silicon crystal growing for the new 300mm Si-wafer generation is planned for the second half of 2003. With a revival in the electronics and semiconductor market expected, this new type of system will considerably strengthen our hold on the market.

In the plasma systems division, the main focus of development was the world's first microwave plasma system to treat individual 'dies' during the assembly of semiconductor chips. Plasma System 80, specially designed for inline production, was introduced at the SEMICON Europe fair in April 2003 for the first time and aroused lively interest.

As regards the Microwave Plasma System 800, it was possible to double the etching rate of the already highly productive manufacturing system for 200 mm wafer fabs by optimizing the process software.

10

Consolidated Balance Sheet* (US-GAAP)

As ts se in EU R '0 00	31 .0 3. 03	31 .1 2. 02	Li ab ili tie s in EU R '0 00	31 .0 3. 03	31
Cu t a et rr en ss s			Cu t l ia bi lit ie rr en s
Li id ts qu as se	5 ,3 70	7 ,0 77	Ba nk ab le (c ) ot nt n es p ay ur re	2 ,8 55
ad ble Tr ts iva e ac co un re ce	5 ,2 98	5 ,8 51	ad ab le Tr ts e ac co un p ay	1 ,6 49
Am du ffi lia d ni nt to te ou s e a co m pa es	0	0	Lia bi lit ies d ffi lia d ni to te ue a co m pa es	11
Am nt du to iat ed ni ou s e a ss oc c om pa es	24 2	1	Ad ts ive d rd va nc e pa ym en re ce on o er s	2 ,1 29
Ot he ab les eiv r r ec	82 1 ,5	2 ,2 97	Ot he r l bi lit ia ies	63 1 ,1
In ies nt ve or	7 ,7 97	9 ,5 61	De fe d lia bi lit ies ta rre x	39 5
ls d lie Ra at ia m er an su pp s w	3 ,9 79	3 ,9 26	Ta isi pr ov on x	41 0
W k in or pr oc es s	1 ,7 01	1 ,1 35	Ot he r a cc ru es e xp en se s	4 ,3 75
of Co st ple te d nt ct s u nc om co ra s			fe De d in rre co m e	0
in ex ce ss of lat ed b illi re s	1 ,1 91	3 ,3 15	l c li ab ili tie To ta nt ur re s	12 ,9 87
ng Fin ish ed du ct s / ds p ro g oo	92 6	1 ,1 85	S ci al it el in ub si di at to pe em r g s es	,2 05 1
Ot he nt et r c ur re a ss s	9 45	46 0	li ab ili tie Lo -t ng er m s
Pr ai d nd ed in ep ex pe ns es a a cc ru co m e	10 3	10 3	No ble te s pa ya	1 ,7 34
fe d De ta ts rre as se x	74	10 4	ls Pe io ns n ac cr ua	4 ,7 91
To l c ta nt et ur re a ss s	20 ,9 25	25 ,4 54	To l l li ab ili tie ta te on g- rm s	6 ,5 25
Fi d ts xe as se			Mi rit int t no y er es	54 6
l a Fin cia et an ss s	18 4	20 3	Sh eh ol de ' e it ar rs qu y
Ta ib le ts ng as se	9 ,6 89	10 ,2 84	Sh pit al ar e ca	21 ,4 50
ib le In ta ts ng as se	8 ,7 84	8 ,9 17	ed Re ta in ni e ar ng s	1 ,8 38
fe d De ta ts rre x as se	71 4 ,7	,6 26 4	Ot he eh siv in r c om pr en e co m e	-1 98
To ta l f ix ed et a ss s	23 ,4 28	24 ,0 30	To l s ha ho lde ' e it ta re rs qu y	23 ,0 90
l a To ta et ss s	44 ,3 53	84 49 ,4	l e it d lia bi lit ie To ta qu y an s	44 ,3 53

* unaudited

* unaudited 12

Statement of Cash Flow* (US-GAAP)

ol id ed h Fl Co at C S ta te t ns as ow m en	/2 I 00 3
fo he Q nd ed ch 3 , 2 00 3 r t rte M 1 ua r e ar	'00 0 in EU R
t l Gr ou p ne os s	-6 55
+/ De iat io / rit fi d ts pr ec n w e- up s on xe as se -	64 4
f +/ In / de isi ea se ea se o pr ov on cr cr s -	50 9
+/ / d ef d De in in ta cr ea se cr ea se er re xe s -	,0 -1 41
+/ In / de f t he cia l i te cr ea se cr ea se o s pe m - fo ub sid ies r s	-3 0
fl +/ Ot he r i / ot im ct in sh nc om e ex pe ns es n pa g ca ow -	-5 42
-/ Ga s / lo fr d ls of fi d in is ts + ss es om po sa xe as se	7
-/ Ea in el in in ies at to ot + rn gs r g m or	-7 5
-/ / de f i In to rie + cr ea se cr ea se o nv en s, tra de eiv ab les nd th et r ec a o er a ss s	2 ,3 52
+/ / de f t de ab les In cr ea se cr ea se o ra p ay - d he r l bi lit ot ia ies an	-1 ,5 71
Ca sh F lo f ti iv iti ct w ro m o pe ra ng a es =	-4 02
ds fr d ls of fi l a Pr is ia et + oc ee om po sa na nc ss s	4
Pu ha of in in fi ia l a st ts et rc se s ve m en na nc ss s -	0
h d bu bi Ne t c ire in sin tio + as ac qu es s co m na ns	0
Pu ha f a iat ed ni rc se o ss oc c om pa es -	0
Pr ds fr d is ls of in ta ib le ts + oc ee om po sa ng as se	7
ha of ib le d ib le Pu ta in ta ts rc se s ng an ng as se -	-9 2
O flo fr in tiv it ut st t = w s om ve m en ac y	-8 1

	I /2 00 3 '0 00 in EU R
Pr ds fr in f s ha ita l + oc ee om cr ea se o re c ap	0
ds fr dd al Pr ts in to iti + oc ee om p ay m en a on id l -in ita pa -c ap	0
ha ho ld (d iv id Pa ts to ts ym en s re er s en - , al th ) pit t ts ca re pa ym en , o er p ay m en	0
+/ Pr ds / fr /t in iti ts oc ee pa ym en om o m or es - (c ita l i , d iv id ita l r ts ts ap nc re as es en , c ap ep ay m en , he ) ot ts r p ay m en	0
Pr ds fr is f b ds nd b in + oc ee om su an ce o on a or ro w g	76 1
l r f b ds Pr in ci ts pa ep ay m en o on - d he r f in cia l l ot an an oa ns	-5 1
+/ Ch f s ho fi l l bi lit rt- te ia ia ies an ge o rm na nc -	28 -1 ,9
O flo fr f in ci iv it ut ct w s om an ng a y =	,2 18 -1
Ch f l id i ts an ge o qu as se	-1 ,7 01
+/ Cu lat io ef fe nd tra ct rre nc y ns n a - he al ha f l id ot i ts r v ue c ng es o qu as se	-3
+/ - C ha li id ult in fro to ts ng es qu as se r es g m ol id io at co ns n	-2
of Li id ts t t he ta rt iod + qu se p er as a s	7 ,0 77
Li id of he nd f rio d et t qu a ss s e o pe =	,3 5 71

* unaudited

Development of Shareholder's Equity*

St of ha in at t em en c ng es sh eh ol de ' e it ar rs qu y	Sh ed ar be Nu m r	is su es '0 EU R 00	Ad EU	di tio l na id -in pa pit al ca '0 R 00	Re in ed ta in ea rn gs '0 EU R 00	Ot he r c om - eh siv pr en e in co m e '0 EU R 00	Sh ar e ho ld s' er uit eq y '0 EU R 00
St at 3 1. 12 .2 00 1 us	14 ,1 55 ,5 98	1 ,5 34		36 5	11 ,3 01	3	13 ,2 03
St 0 01 .2 00 2 at 1. us	98 14 ,1 55 ,5	34 1 ,5		36 5	,3 01 11	3	13 ,2 03
Ca pit al in I cr ea se	1 ,5 73 ,1 00	17 0		3 ,8 29			3 ,9 99
al Ca pit in I I cr ea se	1 ,8 21 ,2 90	19 8		3 ,7 46			3 ,9 44
Di rib io st ut n					-2 ,5 56		-2 ,5 56
Pla Ac isi tio Te -G qu n ro up	3 ,9 00 ,0 00	19 ,5 48		-1 0 ,2 27			9 ,3 21
cla ifi of Re tio ss ca n ed ta in ni re e ar ng s				2 ,4 87	-2 ,4 87		0
Fo i di ffe re gn c ur re nc y re nc e						-1 75	-1 75
f Ch to t he an ge co pe o s ol id io / rti ci tio at co ns n pa pa ns					-3 1		-3 1
al of Ca pit iza tio is ct n su e pr os pe us				-2 00			-2 00
Ne t l of he t os s y ea r					-3 ,7 22		-3 ,7 22
St at 3 1. 12 .2 00 2 us	21 ,4 49 ,9 88	21 ,4 50		0	2 ,5 05	-1 72	23 ,7 83
St 0 01 .2 00 3 at 1. us	21 49 ,9 88 ,4	21 50 ,4		0	2 05 ,5	72 -1	23 83 ,7
Fo i di ffe re gn c ur re nc y re nc e						-2 6	-2 6
he ha Ot r c ng es					-1 3		-1 3
Ne t l of he t os s y ea r					-6 55		-6 55
St at 3 1. 03 .2 00 3 us	21 ,4 49 ,9 88	21 ,4 50		0	1 ,8 37	-1 98	23 ,0 89

* unaudited

Outlook

Outlook

In the light of the general economic climate, our expectations for the current financial year remain conservative.

Incoming orders in the first quarter largely met our expectations in the vacuum systems division (€ 7.4 million) and plasma systems division (€ 3.7 million). However, investment restraint in the semiconductor segment is clearly noticeable in the crystal growing division (€ 0.2 million).

We are certainly reckoning on fluctuations in incoming orders, employee workloads and sale revenues during the year.

Leading market research institutes such as Gartner* are expecting a recovery in the Group's important semiconductor segment as a result of less geopolitical tension. They anticipate a 7.2% rise in investments worldwide in the semiconductor equipment sector. Investments for wafer production plants are expected to increase by 8.4%, the expenditure for packaging and other manufacturing machines even more so, by 21.4%.

Premature hopes of investment restraints fading, possibly bolstered by negotiations on new and partially unexpected projects, could easily lead to neglecting restructuring measures. We are therefore adhering to our policy that our overriding task is to adjust cost structures by streamlining the organization and to take further measures according to our order book position.

A decline in fixed costs resulting from the implementation of our restructuring measures will clearly ease the pressure on the operating result during the second half of the year. Only a slight increase in sales in a year-on-year comparison will enable us to reach a breakeven in the operating result in the course of the year.

We will not lose sight of our aim to exploit growth opportunities, e.g. in markets such as China and in the USA, or to strengthen and expand our technological pioneering role through future-oriented research and development.

Our return to a sustained course of growth and earnings is based on the attractive and technologically competitive range of products of the PVA TePla Group with its well-balanced product mix and our determined implementation of all methods to improve the net result.

Executive bodies

Shareholdings and stock options

	f s ha No . o re s he ld f as o 31 .0 3. 03	f S ha No . o re s he ld f as o 31 .1 2. 02		O pt io ns he ld f as o 31 .0 3. 03	O pt io ns he ld f as o 31 .1 2. 02
M Bo d t an ag em en ar
be l Pe te r A	6 ,4 32 ,1 85	6 ,4 32 ,1 85		0	0
Ma in G ie rt r	42 9 ,0 27	42 9 ,0 27		0	0
lk Vo L er an g	0	0		0	0
Cr al ke ai A. W g r	69 00 ,5	69 00 ,5		8 ,3 33	8 ,3 33
is d Su Bo pe or ar rv y
Dr . D ie K ub is tm ar	0	0		0	0
of Pr . H ei r R l ne ys se	0	0		0	0
öh le Ha rt ut B m	37 5	37 5		0	0
M ich l D ie l ae an	2 ,8 00	2 ,8 00		0	0
ol f do rf W D ga ng on	0	0		0	0
Dr . P F rie de et er m an n	0	0		0	0

18

19

Notes

Notes according to the Prime Standard Rules

No changes were made to accounting and valuation methods.

A comparison with the previous year has only limited informative value due to the merger in 2002. As no quarter figures were ascertained for PVA last year, last year's pro-forma figures have been taken from the quarter figures disclosed by TePla at the time and the full year figures for PVA divided by four and then compared with actual figures for 2003 in the profit and loss account. In other respects, reference is made to the 2002 Annual Report for last year's figures in which details are given of the impact of the merger.

Order book position

Incoming orders received by group companies stood at € 11.3 million at March 31, 2003. Orders on hand amounted to € 16.1 million at the end of the first quarter after deducting sales revenues already realized according to "the percentage of completion" (POC).

Development of costs and prices

Costs and prices developed according to expectations.

Investments

Investments in the first three months amounted to gross € 92 thousand.

R&D activities

Expenses for research and development stood at € 704 thousand in the first quarter (previous year € 666 thousand).

Breakdown of earnings

The company operates solely in one segment. See page 4 for the breakdown of earnings by division and site.

Amount distributed or proposed for distribution

A dividend was not distributed nor was a proposal on distribution submitted.

Interim dividend

An interim dividend was not distributed.

Changes to the Management Board and the Supervisory Board

Mr Friedrich G. Meyer left the company's Management Board on the expiry of January 14, 2003.

Occurrences of special significance after closing the period under review

The appointment of the member of the Management Board Mr Craig A. Walker (CFO) was revoked on the expiry of April 11, 2003.

With effect from April 16, 2003, Ms Nina v. Moltke was appointed a further member of the Management Board (CFO).

On April 25, 2003 the assets of the wholly owned subsidiary Vakuum-Anlagen Service GmbH were subjected to insolvency proceedings.

INTERMEDIATE REPORT

PVA TePla AG Hans-Riedl-Str. 5 D-85622 Feldkirchen Phone +49 (0)89 / 905 03 - 0 Fax +49 (0)89 / 905 03 -100 E-Mail: info@pvatepla.com

www.pvatepla.com