Westag AG — Interim / Quarterly Report 2004

Nov 17, 2004

Quarterly Report 3rd Quarter 2004

Activity in the German construction sector continues to decline. The latest figures published by the Federal Statistical Office for the building construction market show that incoming orders declined by 5.2% (accumulated until August). Against this background, it is all the more gratifying that Westag & Getalit AG expanded its nine-month sales by 2.5% from C 122.4 million in the previous year to C 125.5 million.

Due to increased international activities, export sales rose by an impressive 8.7% to C 20.9 million. The export share climbed from 15.7% in 2003 to 16.7%.

Divisions

Sales revenue(in C'000)	Jan. 01 -Sep. 30, 2004	Jan. 01 -Sep. 30, 2003	Change(in %)
Plywood/ShutteringDoors/Frames	19,42152,582	19,30952,593	+ 0.60.0
Laminates/Elements	50,653	47,803	+ 6.0

Despite the continued decline in construction activity, the Plywood/Shuttering division managed to maintain sales at C 19.4 million (2003: C 19.3 million).

At C 52.6 million, sales in the Doors/Frames division were almost exactly on a par with the previous year. The decline in the contract sector was offset by growth in exports and stocked products.

Boosting its sales by 6.0% to C 50.7 million (2003: C 47.8 million), the Laminates/Elements division showed a positive development, not least thanks to increased export activities and successful sales of mineral materials.

Result

The result before income taxes increased strongly to C 5,212 thousand (2003: C 1,531 thousand) for the nine-month period. All three divisions contributed to this growth, which was not least achieved thanks to continued strict cost management. DVFA/SG earnings per share amounted to C 0.52 in the nine-month period (2003: C 0.13).

Profitdata(in C'000)	Jan.01-Sep. 30, 2004	Jan.01-Sep. 30, 2003	Change(in %)
Result from ordinaryactivities	5,333	1,647	+ 224
Earnings before income taxes	5,212	1,531	+ 240
Net profit	2,881	846	+ 241
Net profit per share (in C)	0,50	0.15	+ 233
DVFA/SG earnings per share (in C)	0,52	0.13	+ 300

Investments

Capital expenditure in 2004 will remain below the originally projected C 10.4 million. Our investment projects serve to expand our product range and, hence, our market share as well as to increase our efficiency and quality.

Employees

As of September 30, 2004, we employed 1,229 people (2003: 1,259). At 34.8%, the ratio of personnel expenses to total sales was still clearly below the previous year's 35.4%.

Workforce	Sep. 30,	Sep. 30,	Change
	2004	2003	(in %)
Number of employees(incl. trainees/apprentices)	1,229	1,259	- 2.4 %

Westag & Getalit AG did not hold any own shares as of September 30, 2004.

Outlook

The general economic environment in Germany remains characterised by uncertainty. A certain downward trend is currently expected for the construction sector. Both the residential and the commercial construction sectors are lacking stimulus that could lead to a recovery. Accordingly, we have only modest expectations regarding domestic sales. By contrast, we see opportunities in the export market which we will increasingly take advantage of.

The rationalisation and cost-cutting measures that have been implemented have clearly reduced the ratio of personnel expenses to total sales. The strong competitive pressure forces us to stay on this course. However, the rising prices of some raw materials are gradually making themselves felt in the form of a higher cost of materials. While this requires us to raise the prices of our products, we can do so only with some delay.

The increased competitive pressure means new challenges for our company. Our long-term competitiveness hinges on our product range, our quality, our reliability as a supplier and, last but not least, our cost structure. In view of the measures we have initiated and the strong commitment of our employees, we feel that our growth and profit outlook is positive.

Rheda-Wiedenbrück, November 2004

Westag & Getalit AG The Management Board

Balance sheet

(in C'000)	Sep. 30,2004	Sep. 30,2003
Intangible assets	264	313
Tangible assets	42,006	46,580
Financial assets	103	121
Fixed assets	42,373	47,014
Inventories	29,375	30,719
Debtors and other assets	19,212	20,470
Short-term investments	9,212	66
Cash at banks or in hand	18,645	12,010
Total current assets	76,444	63,265
Prepayments and accrued income	130	99
Total assets	118,947	110,378
Called-up Share Capital	14,643	14,643
Capital reserve	24,345	24,345
Revenue reserves	26,796	26,862
Net profit attributable to shareholders	3,804	1,686
Total equity	69,588	67,536
Deferred reserves	2,813	3,175
Accruals	30,537	23,917
Liabilities	16,009	15,750
Deferred income	0	0
Total equity and liabilities	118,947	110,378

(in C'000)	Juli 01 -Sep. 30, 2004	Juli 01 -Sep. 30, 2003
Sales	41,318	41,454
In/decrease in inventories	-263	-447
Own work capitalised	166	-24
Total operating performance	41,221	40,983
Other operating income	626	415
Cost of materials	18,879	19,260
Personnel expenses	14,404	14,216
Depreciation and amortisation	2,058	2,670
Other operating expenses	4,823	4,416
Interest income	173	79
Write-down of short-term investments	0	0
Interest expense	22	39
Profit from ordinary operations	1,834	876
Extraordinary income	0	0
Extraordinary expenses	0	0
Extraordinary items	0	0
Other taxes	42	50
Profit before income taxes	1,792	826
Income taxes	801	386
Net profit	991	440
DVFA/SG earnings per share(undiluted and diluted)	0.17	0.07
Number of shares(undiluted and diluted)	5,720,000	5,720,000

Income statement on a quarterly basis

(in C'000)	Jan. 01 -Sep. 30, 2004	Jan. 01 -Sep. 30, 2003
Sales	125,474	122,371
In/decrease in inventories	311	16
Own work capitalised	242	80
Total operating performance	126,027	122,467
Other operating income	1,602	1,202
Cost of materials	57,257	56,562
Personnel expenses	43,837	43,296
Depreciation and amortisation	7,260	8,010
Other operating expenses	14,342	14,221
Interest income	468	209
Write-down of short-term investments	0	0
Interest expense	68	142
Profit from ordinary operations	5,333	1,647
Extraordinary income	0	0
Extraordinary expenses	0	0
Extraordinary items	0	0
Other taxes	121	116
Profit before income taxes	5,212	1,531
Income taxes	2,331	685
Net profit	2,881	846
DVFA/SG earnings per share(undiluted and diluted)	0.52	0.13
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. 01 -Sep. 30, 2004	Jan. 01 -Sep. 30, 2003
Net profit/loss	2,881	846
Depreciation and amortisation	7,260	8,010
Extraordinary items	0	0
In/decrease in long-term accruals	450	450
In/decrease in the deferred reserves	-251	-336
Cashflow nach DVFA/SG	10,340	8,970
Result from investment disposals	-62	-40
In/decrease in inventories	-163	-1,683
In/decrease in debtors and other assets	- 2,835	- 4,605
In/decrease in short-term investments	120	268
In/decrease in prepayments andaccrued income	7	168
In/decrease in further accruals	7,158	2,858
In/decrease in liabilities	2,160	1,556
Cashflow from current business activities	16,725	7,492
Additions to fixed assets	-4,242	-2,695
Proceed on disposal of fixed assets	114	136
Proceed on disposal of financial assets	12	16
Cashflow aus Investitionstätigkeit	- 4,116	- 2,543
In/decrease in current due to banks	-313	-1,936
Dividend payments	-1,773	-341
Cashflow from financing activities	-2,086	-2,277
In/decrease in current due to banks	10,523	2,672
Cash at banks and in hand as at Jan. 01	8,122	9,338
Cash at banks and in hand as at Sep. 30	18,645	12,010

Segment	Jan. 01 -Sep. 30, 2004	Jan. 01 -Sep. 30, 2003	Change(in %)
GermanySalesEarnings before income taxes	104,5924,295	103,1591,270	+ 1.4+ 238.2
ExportSalesEarnings before income taxes	20,882916	19,212261	+ 8.7+ 251.0
Full Company (AG)SalesEarnings before income taxes	125,4745,212	122,3711,531	+ 2.5+ 240.4

Segment report for the first 9 months 2004

Statement of changes in equity

	Subscribed capital	Capital reserve	Revenue reserve	Unappropriated	Total
As of Jan. 01, 2003	14,643	24,345	26,894	1,148	67,030
treasury stock reserveWithdrawal from			-32	32	0
Dividend				-341	-341
Net profit				847	847
As of Sep. 30, 2003	14,643	24,345	28,862	1,686	67,536
As of Jan. 01, 2004	14,643	24,345	26,916	2,577	68,481
treasury stock reserveWithdrawal from			-120	120	0
Dividend
Net profit				-1,773	-1,773
As of Sep. 30, 2004	14,643	24,345	26,796	3,804	69,588

Notes on the nine-month report for the period ended September 30, 2004

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 2003 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. 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 7,321,600.

Financial schedule 2004/Current dates*

Press Release Annual Financial Statements 2003 March 26, 2004

May 12, 2004

Annual Press Briefing in Düsseldorf Press Release Report: 1st three months of 2004

Annual General Meeting (AGM) of shareholders in Rheda-Wiedenbrück Press Release Interim report: 1st six months of 2004

DVFA event/analysts' conference Financial Forum in Frankfurt

Press Release Report: 1st nine months of 2004

August 12, 2004

August 31, 2004

November 12, 2004

*The complete financial schedule 2004 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