PVA TePla AG — Interim / Quarterly Report 2005

Sep 1, 2005

INTERMEDIATE REPORT 1 January to 30 June 2005

BE EQUIPPED FOR TOMORROW'S MATERIALS

Foreword by the Management Board

Dear PVA TePla Shareholders,

The second quarter of 2005 saw PVA TePla AG once again achieving positive results after a first quarter that, as in previous years, was relatively weak. Significant growth was generated above all in our core business with vacuum systems, where production is now running to capacity. Owing to this encouraging fact and the anticipated improvement in orders for crystal growing systems, we decided to expand our capacities at the Group's own facilities in Jena. The Supervisory Board has given its approval to this investment in our future.

At our Annual Shareholders' Meeting in Wetzlar in mid-June, a large number of shareholders availed of the opportunity to learn more about the further business prospects of PVA TePla. Both representatives of the DSW and SdK shareholders associations praised the successful turnaround and the high standard of our informative annual report.

Demand for PVA TePla shares increased markedly during the first six months of the year. Our shares are listed in the new GEX® index created for mediumsized companies by Deutsche Börse AG, and showed the best performance among the more than 120 medium-sized companies listed in the index. In response to the much greater interest shown by institutional investors, we organised a roadshow for these investors in Frankfurt and London, thus intensifying our direct communication with this target group.

We are generally optimistic for the future. Business in the Vacuum Systems division is running at a high, stable and profitable level. In the plasma systems field, we are now witnessing a revival in business after a weak first half of the year. Our greatest opportunities are in the field of crystal growing systems, and are driven especially by the dynamic growth of the solar industry. With major orders from China and a number of other large projects in the pipeline, we expect strong growth in business volume in this area.

On behalf of my fellow managers and our employees, I would like to thank you, our shareholders and business partners, for the confidence you have shown in the company. We will do everything in our power to justify that trust and confidence.

Peter Abel Chairman of the Management Board

Key facts and figures

f J As 30 , 2 00 5 o un e	/2 II 00 5 EU R '0 00	/2 II 00 4 EU R '0 00	Ch an ge
Sa les R ev en ue s	23 ,6 36	19 ,7 17	+3 ,9 19
of Gr it os s pr	4 ,9 82	5 ,2 43	-2 61
% f s al In o es r ev en ue s	21 .1	26 .6	-5 .5
O tin lt (E BI T ) pe ra g re su	-7 4	-1 ,1 65	+1 ,0 91
f s al In % o es r ev en ue s	-0 .3	-5 .9	+5 .6
Ne ult fo he iod t r r t es p er	16 8	-6 77	+8 45
f s al In % o es ev en ue s r	0. 7	-3 .4	+4 .1
ha (€ ) Ea in rn gs p er s re	0. 01	-0 .0 3	+0 .0 4
Em pl (n be r) oy ee s um	25 7	25 0	+7
de In in co m g or rs	23 ,9 35	26 ,1 10	-2 ,1 75
Or de r b klo ac g	21 ,8 97	17 ,7 33	+4 ,1 64
Bo ok to b ill R at io	1. 0	1. 3	-0 .3
sh low fr Ca F tin om o pe ra g tiv iti ac es	-2 ,2 15	1 ,2 39	-3 ,4 54

Report on Business Development

Substantial revenue increase in core business

Re th ve nu e gr ow b di vi sio y ns	I-I I /2 00 5 EU R '0 00	I-I I /2 00 4 EU R '0 00	Ch an ge %
Va S te cu um ys m s	16 ,4 80	11 ,2 05	+4 7. 1
l G Cr ta in S te ys ro g ys m s w	2 ,1 50	76 7	+1 80 .3
Pla S te sm a ys m s	,0 06 5	7 ,7 45	-3 5. 4
To l r ta ev en ue	23 ,6 36	19 ,7 17	19 .9

th Re ve nu e gr ow b gi re on s y	/2 00 I-I I 5 '0 EU R 00	/2 00 I-I I 4 '0 EU R 00	Ch an ge %
Ge rm an y	9 ,9 41	7 ,7 80	+2 7. 8
(e lud in Ge y) Eu ro pe xc g rm an	,6 80 4	2 ,6 19	8. +7 7
No rth A ica m er	2 ,7 08	3 ,6 74	-2 6. 3
As ia	8 ,2 35	7 ,5 67	+8 .8
Ot he r	77 8	28	+2 ,6 78 .6
Co ol id at io ns n	-2 ,7 06	-1 ,9 51	-3 8. 7
l r To ta ev en ue	23 ,6 36	19 ,7 17	19 .9

In the first half of 2005, the PVA TePla Group achieved a substantial increase in revenue, not only in a yearon-year comparison but also in relation to the previous quarter. Total sales revenues by mid-year were € 23.6 million, almost 20% more than the HY1/2004 figure (€ 19.7 million). At € 12.9 million, second-quarter sales topped the first-quarter figure (€ 10.7 million) by more than 20%.

In our core business with vacuum systems, revenues leaped from € 11.2 million in HY1/2004 to € 16.5 million in HY1/2005. The Vacuum Systems division now accounts for almost 70% of total Group sales and is by far the strongest generator of revenue. The Plasma Systems division has been suffering under the downturn in the semiconductor industry and generated

Report on Business Development

€ 5.0 million in revenue, not reaching again the high prior-year figure (€ 7.7 million). In contrast, the Crystal Growing Systems division succeeded in increasing the prior-year revenue figure of € 0.8 million to a current € 2.2 million, underlining the positive trend established in the previous quarter.

Germany dominates the regional breakdown of sales, just ahead of Asia, Europe and North America.

Q2 earnings growth compensates for weak first quarter

Following a weak first quarter, the PVA TePla Group managed a return to positive earnings in the second quarter.

Gross profit, at € 5.0 million, was slightly under the prior-year figure of € 5.2 million. This lower result is mainly due to weak sales in the Plasma Systems division, where margins are high, and to the likewise low sales volume of the Crystal Growing Systems division. Compared to the first half of 2004, improvements in cost structures are having a clear impact. The cost of sales was reduced from € 3.0 million in HY1/2004 to € 2.6 million. Administration expenses were unchanged at € 2.1 million. R&D expenditure was reduced by intensive cost management to € 0.5 million (HY1/2004: € 0.8 million). Another contribution to improved earnings stemmed from the fact that restructuring expenses were no longer incurred, unlike in the previous year (HY1/2004: € 0.3 million).

Although the half-year operating profit is still slightly negative, at € –0.1 million (HY1/2004: € –1.2 million), the Group achieved a positive operating profit of € 0.3 million in the second quarter (Q2/2004: € 0.4 million).

The positive net result for the period of € 0.2 million (HY1/2004: € –0.7 million) is primarily due too recognition of € 0.2 million in deferred taxes in accordance with IFRS (HY1/2004: € 0.4 million) and of a € 0.1 million contribution to earnings by the associated company PVA MIMtech LLC in the USA (HY1/2004: zero).

Operative cash flow in the first half of 2005 was negative, at € –2.2 million (HY1/2004: € 1.2 million). This is mainly due to an increase in work in progress as a result of efforts to dismantle the large order backlog. Liquid funds at the end of the first half-year totalled € 1.8 million, slightly more than the same time a year before (€ 1.7 million).

Consolidated Income Statement* (IAS/IFRS)

Co ol id at ed I St at t ns nc om e em en	3 Mo nt hs		6 Mo nt hs
	01 .0 05 4. - 30 .0 6. 05 EU R '0 00	01 .0 04 4. - 30 .0 6. 04 EU R '0 00	01 .0 05 1. - 30 .0 6. 05 EU R '0 00	01 .0 04 1. - 30 .0 6. 04 EU R '0 00
Re ve nu es	12 ,9 22	11 ,3 99	23 ,6 36	19 ,7 17
Co f od ld st o go s so	-1 0 ,1 31	15 -7 ,7	-1 8 ,6 54	-1 73 4 ,4
Gr of it os s pr	2 ,7 91	3 ,6 84	4 ,9 82	5 ,2 43
llin Se g ex pe ns es	-1 ,2 51	28 -1 ,5	-2 ,5 72	-3 ,0 41
Ge l a dm in ist tiv ne ra ra e ex pe ns es	-1 ,1 66	-1 ,0 51	-2 ,1 48	-2 ,0 76
ch nd d el Re t e se ar a ev op m en xp en se s	-2 34	-3 97	-4 69	-7 70
in d he Re st ct ot ru ur g an r rri no n- re cu ng e xp en se s	0	-1 19	0	-2 90
Am tiz io of dw ill at or n g oo	0	0	0	0
he nd Ot tin in r o pe ra g ex pe ns es a co m e	20 0	-2 30	13 2	-2 31
O ti ul (E ) t BI T pe ra ng r es	33 8	35 9	-7 4	65 -1 ,1
In in / te st re co m e ex pe ns es	-2 2	-8 1	-4 2	-1 16
/ los of ed E it in in E it in iat ni qu y ea rn gs qu y se s a ss oc c om pa es	83	-2	10 7	4
Ne t i t i d t i nt er es nc om e an ne nc om e fr ia d ni te om a ss oc co m pa es	62	-8 4	65	-1 11
Re lt fr rd in tiv iti su om o ar y ac es	40 0	27 5	-1 0	-1 ,2 76
In ta co m e x	16	0	-9 1	0
De fe d ta rre x	-1 33	-1 84	15 2	44 3
fro In t he ha in tin et ho ds co m e m ng e co un g m c ac	0	0	0	0
ult fo he iod Ne t r r t es p er	28 3	91	52	-8 33
Mi rit int t no y er es	52	67	11 6	15 6
ul t f he io d af in it in Ne t r t te te st es or p er r m or y re	33 4	15 7	16 8	-6 77
Ea in ha ( ba sic ) rn gs p er s re	0. 02	0. 01	0. 01	-0 .0 3
Ea in ha ( di lut ed ) rn gs p er s re	0. 02	0. 01	0. 01	-0 .0 3
gh d sh di W ei te ut st av er ag e ar es o an ng (b ) ic as	21 ,4 49 ,9 88	21 ,4 49 ,9 88	21 ,4 49 ,9 88	21 ,4 49 ,9 88
W ei gh d sh di te ut st av er ag e ar es o an ng (d ilu d ) te	21 49 ,9 88 ,4	21 49 ,9 88 ,4	21 49 ,9 88 ,4	21 49 ,9 88 ,4

Workforce / R&D

Slight increase in workforce size

As at 30 June 2005, the number of employees in the PVA TePla Group was 257, slightly more than in mid-2004 (250) and at the end of the first quarter (246). This figure includes the workforce at Xi'an in China, which was not integrated into the Group until the end of 2004. The workforce grew in Germany and China, in particular.

As at the reporting date, there were 212 employees in Germany, 28 in the USA, 11 in China and 6 in Denmark.

Research and development

In the first six months of 2005, the PVA TePla Group spent € 0.5 million on R&D (HY1/2004: € 0.8 million).

In the Vacuum Systems division, development work is usually carried out in connection with customer orders and is not separately posted as R&D expense.

The design and development of the VGF plant for polycrystalline silicon was completed by the Vacuum Systems division in the second quarter with a feeder for filling the crucible during the melting process. The customer benefits from better use of the crucible volume, which gives the plant an increased production capacity.

Rapid integrated cooling for vacuum ovens was simulated and optimised using the "EFD.lab" thermodynamic calculation software installed in the first quarter, and a basis for calculating configuration parameters was developed. This enables the design of facilities to

be optimised for the respective application. By using this software, the gas feed for reactive gases in vacuum and pressure sintering systems was developed and optimised for even greater enhancement of product quality and homogeneity.

After successful completion of the governmentassisted project to develop a new 300 mm silicon crystal pulling plant, the Crystal Growing Systems division continues to support the project partners in tests of the plant. 300 mm silicon crystals are grown in this plant in batches of up to 350 kg. With this newly-developed 300 mm technology, the Crystal Growing Systems division will profit substantially from the growing demand for 300 mm silicon wafers. In conjunction with the project partners, a concept is now being prepared to further optimise the engineering design of the plant. This concept forms the basis for further expansion of 300 mm production capacities.

A multiannual partnership has been started with a leading company to develop an innovative crystal growing system for the fast-growing compound semiconductor materials manufacturing. The crystal-growing equipment will be used within the production chain to make advanced compound semiconductor substrates for future applications. More details will be disclosed as the new crystal growing system will be completed in early 2006. The driving forces of the market are found in global efforts to achieve reductions in energy consumption and to distribute energy.

As part of the solar energy projects in China, development work is being carried out both at sites in Germany (Asslar and Jena) and in Xi'an (domicile of Xi'an HuaDe CGS GmbH) to optimise and test solar crystal growing systems for the Chinese market. The rapid growth of solar engineering in China is still of great importance for the Crystal Growing Systems division, a manufacturer of solar energy systems.

In the Plasma Systems division, development work was concentrated on plasma etching of a highly resistant photoresist mask used in MEMS (Micro-Electro-Mechanical Systems). A number of basic processes have been developed in collaboration with several key customers.

In plasma applications for the flat panel market, surface activation processes were developed in collaboration with some major industrial customers for coating with active organic polymers (electrically conductive plastic), with simultaneous ITO (indiumtinoxide) cleaning of the substrate to improve the light yield and brilliance of colours.

Tests of a new process are being conducted at a Taiwanese customer in the field of flat panel production using pilot systems supplied by the Plasma Systems division for entry into the mass market.

Consolidated Balance Sheet* (IAS/IFRS)

As ts se in '0 00 EU R	30 .0 6. 20 05	31 .1 2. 20 04
Lo -t et ng er m a ss s
In ib le ta ts ng as se	8 ,1 12	8 ,1 96
ib le Ta ts ng as se	7 ,2 43	7 ,4 78
Fin cia l a et an ss s	30 6	17 0
To ta l l te et on g- rm a ss s	15 ,6 62	15 ,8 44
Sh t- te et or rm a ss s
In ies nt ve or	12 ,9 50	10 ,5 93
ls d lie Ra at ia m er an su pp s w	3 ,2 21	3 ,0 29
W k in or pr oc es s	2 ,8 33	2 ,2 15
Co st of ple te d nt ct s u nc om co ra s in f r el ed b illi at ex ce ss o ng s	6 ,0 85	4 ,2 60
ish ed du / od Fin ct p ro s go s	81 0	1 ,0 89
ad iva ble Tr ts e ac co un re ce d he ab les ot eiv an r r ec	,2 48 5	,9 03 5
Tr ad iva ble ts e ac co un re ce	4 ,0 48	4 ,9 96
du ed Am nt to iat ni ou s e a ss oc c om pa es	16 6	23 7
Ot he eiv ab les r r ec	,0 34 1	67 0
Re iva ble fro fu nd ta ce s m x re s	3	12
id Li ts qu as se	1 ,7 62	3 ,4 56
Pr ai d nd ed in ep ex pe ns es a a cc ru co m e	40 2	49
l s ho To ta rt -t et er m a ss s	20 ,3 65	20 ,0 13
fe ed De t et ax a ss s rr	6 ,4 47	6 ,1 80
l a To ta et ss s	42 ,4 74	42 ,0 37

Li ab ili tie s in EU R '0 00	30 .0 6. 20 05	31 .1 2. 20 04
Sh eh ol de ' e it ar rs qu y
Sh al pit ar e ca	21 ,4 50	21 ,4 50
Re in ed ni ta e ar ng s	20 1	35
Ot he eh siv in om pr en e co m e r c	-2 77	-5 04
Mi rit int t no y er es	22 5	34 1
To l s ha ho ld s' it ta re er e qu y	21 ,5 99	21 ,3 22
S ci al it el in at to pe em r g in st t ts ve m en gr an	1 ,0 30	1 ,0 96
Lo li ab ili tie -t ng er m s
No te ble s pa ya	1 ,6 60	1 ,7 84
Ot he r l bi lit ia ies	12	11
Pe io isi ns n pr ov on s	5 ,8 60	5 ,6 35
he Ot vi sio r p ro ns	28 3	31 9
To l l li ab ili tie ta te on g- rm s	7 ,8 16	7 ,7 49
Sh li ab ili tie t- te or rm s
Ba nk ot ab le (c nt ) n es p ay ur re	1 ,7 14	87 0
ad ab le Tr ts e ac co un p ay	,3 69 1	2 ,0 64
Lia bi lit ies d ffi lia d ni to te ue a co m pa es	0	0
bi lit d ed Lia ies to iat ni ue a ss oc c om pa es	0	14 7
Ad ive d rd ts va nc e pa ym en re ce on o er s	2 ,9 71	3 ,5 77
Ot he r l ia bi lit ies	1 ,1 22	1 ,0 54
Ta isi x pr ov on	75	0
De fe d lia bi lit ies ta rre x	89 6	87 5
he Ot vi sio r p ro ns	3 ,8 78	3 ,2 79
fe d in De rre co m e	4	4
To ta l s ho rt -t li ab ili tie er m s	12 ,0 29	11 ,8 70
To ta l e it d lia bi lit ie qu y an s	42 ,4 74	42 ,0 37

* unaudited

Consolidated Cash Flow Statement* (IAS/IFRS)

ol id ed h Fl Co at C ns as ow St at t em en	01 .0 1. 20 05 - 30 .0 6. 20 05 '0 00 in EU R	01 .0 1. 20 04 - 30 .0 6. 20 04 '0 00 in EU R
Ne ult fo he iod t r r t es p er	52	-8 33
+/ / De iat io rit pr ec n e- up s on w - fix ed et a ss s	60 5	88 4
+/ / de f In isi cr ea se cr ea se o pr ov on s -	86 3	59 0
+/ De / in in d ef d cr ea se cr ea se er re - ta xe s	-2 46	43 -4
+/ In / de f t he cia l cr ea se cr ea se o s pe - ite el in in at to st t ts m r g ve m en gr an	-6 7	-6 6
+/ he / Ot r i ot nc om e ex pe ns es n - im in sh fl ct pa g ca ow	-3 50	-2 90
-/ s / lo fr d ls of Ga in is + ss es om po sa fix ed et a ss s	0	8
-/ / de f i In to rie + cr ea se cr ea se o nv en s, de ab les nd th tra eiv et ec a o er a ss s r	-1 ,6 93	-8 55
+/ In / de f t de cr ea se cr ea se o ra - bl nd th li ab ilit ies pa ya es a o er	,3 78 -1	2 ,2 44
Ca sh F lo f ti = w ro m o pe ra ng tiv iti ac es	-2 ,2 15	1 ,2 39

	* u ud ite d na
--	-----------------------------

		01 .0 1. 20 05 - 30 .0 6. 20 05 '0 in EU R 00	01 .0 1. 20 04 - 30 .0 6. 20 04 '0 in EU R 00
+	Pr ds fr d is ls of oc ee om po sa fin cia l a et an ss s	0	12 2
-	of Pu ha in st ts in rc se s ve m en fin cia l a et an ss s	0	-1 47
-	ha of ib le d Pu ta rc se s ng an in ta ib le ts ng as se	-2 88	-6 20
=	Ca sh lo f in F st t w ro m ve m en tiv it ac y	-2 88	-6 45
-	Pr in ci l r f b ds nd ts pa ep ay m en o on a he r f l l ot in cia an oa ns	27 -1	18 -1
+/ -	Ch f s ho fi ia l rt- te an ge o rm na nc lia bi lit ies	84 4	-1 ,0 53
=	Ca sh F lo f f in ci w ro m an ng tiv it ac y	71 7	-1 ,1 71
	Ch f l id i ts an ge o qu as se	-1 ,7 86	-5 77
+/ -	Cu lat io ef fe tra ct rre nc y ns n d he al ha f ot an r v ue c ng es o li id ts qu as se	91	10
+	Li id he of iod ts t t ta rt qu as se a s p er	3 56 ,4	2 ,2 68
=	Li id et at t he nd f qu a ss s e o rio d pe	1 ,7 62	1 ,7 01

Development of Shareholders' Equity* (IAS/IFRS)

of ha in St at t em en c ng es sh eh ol de ' e it ar rs qu y	Sh ed is ar su es		Ad di tio l na id -in pa pit al ca	ed Re ta in in / ea rn gs Ac ul ed at cu m de fic it	Ot he r c om - eh siv pr en e in co m e	Mi rit no y int t er es	To l ta Sh eh old s' ar er uit eq y
	Nu be m r	EU R '0 00	EU R '0 00	EU R '0 00	EU R '0 00	EU R '0 00	EU R '0 00
St at 3 1. 12 .2 00 3 us	21 ,4 49 ,9 88	21 ,4 50	0	-4 41	-3 56	30 1	20 ,9 54
St 0 1. 01 .2 00 4 at us	21 ,4 49 .9 88	21 ,4 50	0	-4 41	-3 56	30 1	20 ,9 54
Fo i di ffe re gn c ur re nc y re nc e					-1 49		-1 49
Ch du to it inv te an ge s e e qu y es e						19 2	19 2
Ne of it fo he t r t pr y ea r				47 8		-1 51	32 7
St at 3 1. 12 .2 00 4 us	21 ,4 49 ,9 88	21 ,4 50	0	37	-5 05	34 2	21 ,3 24
St 0 1. 01 .2 00 at 5 us	21 49 ,9 88 ,4	21 50 ,4	0	37	05 -5	34 2	21 ,3 24
Fo i di ffe re gn c ur re nc y re nc e					22 7		22 7
of fo he iod Ne t it r t pr p er				8 16		-1 16	52
Ot he ha r c ng es		0	0	-4	1	-1	-3
St at 3 0. 06 .2 00 5 us	21 ,4 49 ,9 88	21 ,4 50	0	20 1	-2 77	22 5	21 ,5 99

Outlook

At € 23.9 million (HY1/2004: € 26.1 million), the volume of incoming orders received by the Group continues to show an encouraging trend. The bookto-bill ratio was just above one. The biggest share of order backlog is held by the Vacuum Systems division, which has orders amounting to € 13.1 million (HY1/2004: € 14.5 million). The Plasma Systems division generated € 5.8 million in order volume, compared to € 8.5 million in HY1/2004. Orders received by the Crystal Growing Systems division totalled € 5.0 million (HY1/2004: € 3.1 million).

Compared to HY1/2004 (€ 17.7 million), the order backlog remained high, increasing to € 21.9 million by the end of the second quarter.

The encouraging revenue performance was mainly an achievement of the Vacuum Systems division. When combined with the order backlog in this division and the persistently good situation as regards projects, a continued and high revenue level is safeguarded until well into the year 2006.

In the Crystal Growing Systems division, the current stock of orders means that the revenue target for 2005 will be reached. The first order for our Xi'an HuaDe CGS joint venture in China, placed in the third quarter and worth around € 3.5 million, provides further encouraging outlook prospects. We expect the Crystal Growing Systems division to be the strongest source of revenue growth in the near future. A key role is played here by the partnership agreement and major order for the solar industry in China. The overall situation of this complex project is progressing well.

Revenue in the Plasma Systems division was below expectations in the first half of the year. This division is dependent on the semiconductor industry, especially, which continued to operate well under the previous year's level during the first six months of 2005. This particular market is now showing signs of recovery, so we are now optimistic for the second half of the year.

The Management Board takes a positive view of business development in the second half-year. From today's perspective, we expect to achieve a 10-20% increase in total annual revenue compared to 2004. Earnings are also expected to increase in a year-onyear comparison. Given the weak first half-year in the Plasma Systems and Crystal Growing Systems divisions, we see the EBIT profit margin coming in within a range of 1-3 %.

Transition to IFRS / Executive bodies

Effects of the transition to International Financial Reporting Standards (IFRS)

Until 31.12.2004, the PVA TePla Group conducted its accounting and reporting in accordance with US GAAP (United States Generally Accepted Accounting Principles). Since the beginning of 2005, accounting and reporting by the PVA TePla Group has been conducted in compliance with the International Financial Reporting Standards (IFRS). For an explanation of how the shareholder equity and net profit/loss reported under US GAAP are reconciled at each of the relevant reporting dates (1 January 2004, and at the end of each quarter in 2004) to the equity and net profit/loss under the new IFRS structure, please refer to pages 21-24 of our Interim Report for the first quarter of 2005.

The prior-year figures included in the present Report have been converted – where relevant – from US GAAP to IFRS.

23

Executive bodies

Shareholdings and stock options

	be f Nu m r o sh ar es he ld f as o 30 .0 6. 20 05	be f Nu m r o sh ar es he ld f as o 31 .0 3. 20 05	O pt io ns he ld f as o 30 .0 6. 20 05	O pt io ns he ld f as o 31 .0 3. 20 05
M t Bo d an ag em en ar
be l Pe te r A	5 ,9 91 ,2 75	85 6 ,4 32 ,1	0	0
Ar nd B oh le	0	0	0	0
Ma rti Gi n er	19 0 ,2 27	27 5 ,2 27	0	0
lke Vo r L an g	0	10 0 ,0 00	0	0
Su is Bo d pe rv or y ar
Al de ex an r le be W itz vo n n	0	30 0	0	0
of Pr . D r. Gü nt B rä er ue r	0	0	0	0
Dr . P et er ied Fr em an n	0	0	0	0

Notes

Additional notes pursuant to Section 63 of the Stock Exchange Regulations for the Frankfurt Stock Exchange (Section 63 (3) 5 BörsO)

Changes to accounting and valuation methods This quarterly report was prepared in accordance with the International Financial Reporting Standards (IFRS).

Orders

Group incoming orders in the first six months totalled € 23.9 million (HY1/2004: € 26.1 million).

After deduction of realised sales, calculated using the percentage-of-completion method (POC), the order books of the Group companies were valued at € 25.2 million as at 30.06.05 (HY1/2004: € 18.5 million); after Group consolidation, the total was € 21.9 million (HY1/2004: € 17.7 million).

Development of costs and prices

Cost increases for procurements have been largely avoided so far. However, selling prices continue to face severe competitive pressures due to persistent weakness in the economy.

Investments

Group investments in the first six months of 2005 totalled € 288 thousand (HY1/2004: € 620 thousand).

R&D activities

Total group expenditure on research and development was € 469 thousand in the first six months of 2005 (HY1/2004: € 770 thousand).

Revenue breakdown

The Company operates in one segment only. For a breakdown of revenues by division and region, see page 5.

Distributed profits, or proposed profit distribution No dividend was paid out; a distribution of profits was not proposed.

Interim dividends No interim dividends were paid out.

Changes in Management and Supervisory boards None.

Material events since the end of the reporting period

None.

This unaudited Interim Report was prepared in accordance with IFRS (International Financial Reporting Standards). The Management Board is convinced that the consolidated accounts provide a fair view of the net worth, financial position and results of the PVA TePla Group.

Disclaimer:

This Interim Report contains forward-looking statements based on assumptions and estimates by the management of PVA TePla AG. Although we assume that the expectations in these statements are realistic, we cannot guarantee that these expectations will prove correct. The assumptions may harbour risks and uncertainties that can lead to actual results deviating substantially from the forecasts being made. Factors that can cause such deviations include: changes in the macroeconomic and business environment; exchange rate and interest rate variability; launching of competing products; lack of acceptance of new products or services, and modifications to the corporate strategy. PVA TePla does not plan to revise these forecasts, nor does PVA TePla accept any obligation to do so.

INTERMEDIATE REPORT

PVA TePla AG Emmeliusstr. 33 D-35614 Asslar Phone ++49 (0)6441 / 5692-0 Fax ++49 (0)6441 / 5692-111 E-Mail: info@pvatepla.com

www.pvatepla.com