Westag AG — Interim / Quarterly Report 2003

Nov 27, 2003

Westag & Getalit AG managed to keep its sales almost stable in a largely unchanged economic environment. At C 122.4 million, nine-month sales were down only 0.5% on the previous year's C 123.0 million.

Export revenues increased by an impressive 8.4%, pushing the export share up from the previous year's 14.4% to 15.7%.

Divisional sales (in C '000)	Jan. 1 - Sep. 30, 2003	Jan. 1, - Sep. 30, 2002	Change in %
Plywood/Shuttering	19,309	19,910	- 3.0
Doors/Frames	52,593	54,205	- 3.0
Laminates/Elements	47,803	46,523	2.8

Divisions

Even though sales in the Plywood/Shuttering Division declined by 3%, we were able to stabilize the positive divisional results recorded in recent months.

Demand has remained weak, especially in the contract sector. However, by stepping up our efforts in the DIY store segment, we were able to generate strong stimulation for the Doors/Frames Division. Nine-month sales were down 3% on the previous year.

Growth in the Laminates/ElementsDivision was mainly attributable to increased exports and sales of our mineral-based solid surface sheet materials. The Division's sales rose by 2.8%.

Results

The clearly improved result is mainly attributable to the fact that the staff cost ratio has steadily declined in the course of the year. Our strict cost management has also reduced purchasing and overhead costs. Earnings before income taxes in the first nine months of the current fiscal year rose to C 1,531,000 (2002: C 97,000). Net profit amounted to C 846,000 (2002: C 198,000). DVFA/SG earnings per share reached C 0.13 (2002: C -0.12).

Earnings figures (in C '000)	Jan. 1 - Sep. 30, 2003	Jan. 1 - Sep. 30, 2002	Change in %
Result from ordinary activities	1,647	149	1,105
Earnings before income taxes	1,531	97	1,578
Net profit	846	198	427
Net profit per share (in C)	0.15	0.03	500
DVFA/SG earnings per share (in C)	0.13	- 0.12	k. A.

Investments

The focus of our investment activities will remain on efficiency increases and replacements instead of capacity expansion. However, we will remain below our planned investment volume of C 7.4 million in fiscal 2003 and also expect our investment activity to be moderate in 2004.

Employees

As of September 30, 2003, we employed 1,259 people (2002: 1,340). With sales remaining almost unchanged, the ratio of personnel expenses to total sales continued to decline, especially in the third quarter, from 36.8% in the previous year to 35.4%. This year, too, Westag & Getalit remains committed to training young people. We currently employ 48 trainees and apprentices.

Workforce	Jan. 1 - Sep.	Jan. 1, - Sep.	Change
	30, 2003	30, 2002	in %
Number of employees (incl. trainees/apprentices)	1,259	1,340	- 6.0 %

Volume of own shares

As of September 30, 2003, Westag & Getalit AG held 20,047 own shares in its portfolio. All these shares are preference shares.

Outlook

From our point of view, there is still only little stimulation for construction, refurbishing and improvement activity in Germany. Even though the first indicators are pointing to an economic recovery, the fierce competition continues. Thanks to an improved marketing approach and customer group-specific services, we have been able to win market share even in a shrinking market. We will, however, remain true to our policy of not pursuing business at any price. Instead, we seek to increase our sales primarily as a result of intensified export activities, new products and the organizational changes implemented in the DIY segment. We will continue our strict cost-saving policy with a view to increasing our competitiveness and cutting costs.

In view of the results achieved to date and the future outlook, we expect earnings at Westag & Getalit AG to continue to increase.

Rheda-Wiedenbrück, November 2003

WESTAG & GETALIT AG The Management Board

Balance sheet

(in C '000)	Sep. 30 2003	Sep. 30 2002
Intangible assets	313	400
Tangible assets	46,580	51,904
Financial assets	121	137
Fixed assets	47,014	52,441
Inventories	30,719	29,036
Debtors and other assets	20,470	15,865
Short-term investments	66	334
Cash at banks or in hand	12,010	9,338
Total current assets	63,265	54,573
Prepayments and accrued income	99	267
Total assets	110,378	107,281
Called-up Share Capital	14,643	14,643
Capital reserve	24,345	24,345
Revenue reserves	26,862	26,895
Net profit attributable to shareholders	1,686	1,148
Total equity	67,536	67,031
Deferred reserves	3,175	3,511
Accruals	23,917	20,609
Liabilities	15,750	16,130
Deferred income	0	0
Total equity and liabilities	110,378	107,281

Income statement on a quarterly basis

(in C '000)	Jul. 1 - Sep. 30, 2003	Jul. 1, - Sep. 30, 2002
Sales	41,454	41,603
In/decrease in inventories	- 447	- 341
Own work capitalised	- 24	137
Total operating performance	40,983	41,399
Other operating income	415	561
Cost of materials	19,260	19,405
Personnel expenses	14,216	14,965
Depreciation and amortisation	2,670	2,763
Other operating expenses	4,416	4,327
Interest income	79	59
Write-down of short-term investments	0	45
Interest expense	39	48
Profit from ordinary operations	876	466
Extraordinary income	0	0
Extraordinary expenses	0	65
Extraordinary items	0	- 65
Other taxes	50	32
Profit before income taxes	826	369
Income taxes	386	- 33
Net profit	440	402
DVFA/SG earnings per share (undiluted and diluted)	0.07	- 0.05
Number of shares (undiluted and diluted)	5,720,000	5,720,000

(in C '000)	Jan. 1 - Sep. 30, 2003	Jan. 1, - Sep. 30, 2002
Sales	122,371	122,982
In/decrease in inventories	16	36
Own work capitalised	80	340
Total operating performance	122,467	123,358
Other operating income	1,202	1,535
Cost of materials	56,562	56,805
Personnel expenses	43,296	45,365
Depreciation and amortisation	8,010	8,289
Other operating expenses	14,221	14,160
Interest income	209	111
Write-down of short-term investments	0	96
Interest expense	142	140
Profit from ordinary operations	1,647	149
Extraordinary income	0	1,023
Extraordinary expenses	0	978
Extraordinary items	0	45
Other taxes	116	97
Profit before income taxes	1,531	97
Income taxes	685	- 101
Net profit	846	198
DVFA/SG earnings per share (undiluted and diluted)	0.13	- 0.12
Number of shares (undiluted and diluted)	5,720,000	5,720,000

Income statement for the first nine months

Application of funds statement

(in C '000)	Jan. 1 - Sep. 30, 2003	Jan. 1, - Sep. 30, 2002
Net profit/loss	846	198
Depreciation and amortisation	8,010	8,289
Extraordinary items	0	- 45
In/decrease in long-term accruals	450	450
In/decrease in the deferred reserves	- 336	- 379
Cashflow nach DVFA/SG	8,970	8,513
Result from investment disposals	- 40	- 41
In/decrease in inventories	- 1,683	1,937
In/decrease in debtors and other assets	- 4,605	408
In/decrease in short-term investments	268	239
In/decrease in prepayments and accrued income	168	- 29
In/decrease in further accruals	2,858	1,097
In/decrease in liabilities	1,556	- 1,707
Cashflow from current business activities	7,492	10,417
Additions to fixed assets	- 2,695	- 6,254
Proceed on disposal of fixed assets	136	57
Proceed on disposal of financial assets	16	2,301
Cashflow aus Investitionstätigkeit	- 2,543	- 3,896
In/decrease in current due to banks	- 1,936	0
Dividend payments	- 341	- 2,332
Cashflow from financing activities	- 2,277	- 2,332
In/decrease in current due to banks	2,672	4,189
Cash at banks and in hand as at January 01	9,338	2,214
Cash at banks and in hand as at Sep. 30	12,010	6,403

Segment	Jan. 1 - Sep. 30, 2003	Jan. 1, - Sep. 30, 2002	Change in %
Germany Sales Earnings before income taxes	103,159 1,270	105,254 625	- 2.0 103.2
Export Sales Earnings before income taxes	19,212 261	17,728 - 528	8.4 k. A.
Full Company (AG) Sales Earnings before income taxes	122,371 1,531	122,982 97	- 0.5 1,478.4

Segment report for the first nine months

St at em en t of c ha ng es	in e qu it y
	Su bs cr ib ed ca pi ta l	Ca pi ta l r es er ve	Re ve nu e r es er ve	re ta Un in ap ed pr ea op rn ria in te gs d	To ta l
As of Ja n. 1, 2 00 2	14 ,6 43	24 ,3 45	26 ,4 08	2, 39 3	67 ,7 89
tre Wi t as hd ur ra y s wa to l f ck ro re m se rv e			- 2 39	23 9	0
Div id en d				- 2 ,3 32	- 2 ,3 32
Ne t p ro fit				19 8	19 8
As of Se p. 3 0, 2 00 2	14 ,6 43	24 ,3 45	26 ,1 69	49 8	65 ,6 55
As of Ja n. 1, 2 00 3	14 ,6 43	24 ,3 45	26 ,8 95	1, 14 8	67 ,0 31
tre Wi t as hd ur ra y s wa to l f ck ro re m se rv e			- 3 3	33	0
Div id en d				- 3 41	- 3 41
Ne t p ro fit				84 6	84 6
As of Se p. 3 0, 2 00 3	14 ,6 43	24 ,3 45	26 ,8 62	1, 68 6	67 ,5 36

Notes on the nine-month report for the period ended September 30, 2003

1. Accounting principles

The nine-month report of Westag & Getalit AG was prepared in accordance with the provisions of the German Commercial Code as well as DRS 6. The accounting and valuation principles applied were the same as those applied in the Annual Report for 2002 and the previous year's nine-month report. This report has not been audited.

2. Cash flow statement

The cash flows in the cash flow statement were determined using the indirect method.

1. Dividends

The Annual General Meeting of August 26, 2003 decided that a dividend of C 0.12 (2002: C 0.44) be paid out per preference share. No dividend was paid out to holders of ordinary shares (2002: C 0.38). Dividend payments totalled C 341,000 (2002: C 2,332,000).

1. Composition of subscribed capital

The subscribed capital of C 14,643,000 is composed of 2,860,000 no-par ordinary shares and 2,860,000 non-voting no-par preference shares with a total value of C 7,312,600.

5. Management changes

Board member Dierk Knechtel, who was responsible for the Door/Frames Division, left our company at the end of July in agreement with the Supervisory Board of Westag & Getalit AG.

Financial schedule 2003/Current dates*

Press Release Interim report: 1st six months of 2003	August 14, 2003
Annual General Meeting (AGM) of shareholders in Rheda-Wiedenbrück Press Release Information regarding the results of the AGM	August 26, 2003
DVFA event/analysts' conference Financial Forum in Frankfurt	August 27, 2003
Press Release Report: 1st nine months of 2003	November 13, 2003

*The complete financial schedule 2003 can be accessed on the Internet under: www.westag-getalit.de

WESTAG & GETALIT AG • Postfach 2629 • 33375 Rheda-Wiedenbrück Germany • Tel. ++ 49 (0) 52 42/17-0 • Fax ++ 49 (0 ) 52 42/17-7 50 00 www.westag-getalit.de · e-mail: ir@westag-getalit.de