Westag AG — Interim / Quarterly Report 2004

May 28, 2004

Quarterly Report 1st Quarter 2004

Sales

A noticeable recovery of the German construction sector is still not discernible. In the first quarter of 2004, Westag & Getalit AG's sales rose to C 42.4 million, up 4.4% on the previous year (C 40.7 million), in spite of the continued difficult environment.

Increased foreign business enabled us to boost our international sales by 11.3% to C 6.8 million. All three divisions improved their international sales. Overall, our export share stood at 16.0%.

Divisions
Sales revenue (in C '000)	Jan. 01 - Mar. 31, 2004	Jan. 01 - Mar. 31, 2003	Change (in %)
Plywood/Shuttering Doors/Frames Laminates/Elements	6,385 17,117 18,009	5,875 16,904 16,929	8.7 1.3 6.4

Sales in the Plywood/Shuttering division were up 8.7% on the previous year. Our good cost situation permitted us to increase our market share for prefabricated concrete units.

In spite of weak contract business, sales in the Doors/Frames division rose by 1.3% thanks to higher exports and successes in the DIY store segment.

The Laminates/Elements division continued to expand its market position through a 6.4% sales increase. Improvements were made both in the DIY store segment and especially in the export sector.

Result

Thanks to the gratifying sales development in all three divisions of our company and our strict cost management policy, our result before income taxes rose to a gratifying C 1,969 thousand in the first quarter of 2004 (previous year: C 349 thousand). Q1/2004 DVFA/SG earnings per share amounted to C 0.20 (previous year: C 0.03).

Profit data (in C '000)	Jan. 01 - Mar. 31, 2004	Jan. 01 - Mar. 31, 2003	Change (in %)
Result from ordinary
activities Earnings before income taxes	2,009 1,969	382 349	426 464
Net profit	1,089	201	442
Net profit per share (in C)	0.19	0.04	475
DVFA/SG earnings per share (in C)	0.20	0.03	567

Investments

Investments of C 10.4 million have been budgeted for 2004. The investment plan, however, includes some projects which are still under development and may not be realised this year. All other investment activity centres on efficiency and quality-enhancing measures.

Employees

As of March 31, 2004 we employed 1,242 people (previous year: 1,267 people). The ratio of personnel expenses to total sales stood at 34.5% in the first quarter of 2004 (previous year: 35.7%).

Workforce	Mar. 31,	Mar. 31,	Change
	2004	2003	(in %)
Number of employees (incl. trainees/apprentices)	1,242	1,267	- 2.0 %

Volume of own shares

As of March 31, 2004, Westag & Getalit AG held 20,047 own shares in its portfolio. All these shares are preference shares.

Outlook

The general economic environment in Germany remains characterised by uncertainty. While we expect only a slight sales increase in the domestic business, we see substantial growth potential on the export front.

We will continue our aggressive cost management policy. However, the level of market prices in 2004, which will have a significant bearing on our result, remains an unknown quantity. The fierce competition among distributors and retailers obviously has implications for our prices.

We are confident about the successful future development of our result provided we will be able to gain further market shares based on our significantly reduced production costs.

Rheda-Wiedenbrück, May 2004

Westag & Getalit AG The Management Board

Balance sheet

(in C '000)	Mar. 31, 2004	Mar. 31, 2003
Intangible assets	269	205
Tangible assets	43,331	45,135
Financial assets	104	115
Fixed assets	43,704	45,455
Inventories	29,467	29,212
Debtors and other assets	22,111	16,376
Short-term investments	9,332	9,332
Cash at banks or in hand	8,044	8,122
Total current assets	68,954	63,042
Prepayments and accrued income	77	138
Total assets	112,735	108,635
Called-up Share Capital	14,643	14,643
Capital reserve	24,345	24,345
Revenue reserves	26,916	26,916
Net profit attributable to shareholders	3,665	2,576
Total equity	69,569	68,480
Deferred reserves	2,978	3,065
Accruals	25,316	22,929
Liabilities	14,872	14,161
Deferred income	0	0
Total equity and liabilities	112,735	108,635

(in C '000)	Jan. 01 - Mar. 31, 2004	Jan. 01 - Mar. 31, 2003
Sales	42,442	40,660
In/decrease in inventories	447	571
Own work capitalised	33	59
Total operating performance	42,922	41,290
Other operating income	441	380
Cost of materials	19,321	18,986
Personnel expenses	14,806	14,738
Depreciation and amortisation	2,601	2,670
Other operating expenses	4,734	4,896
Interest income	130	69
Write-down of short-term investments	0	3
Interest expense	22	64
Profit from ordinary operations	2,009	382
Extraordinary income	0	0
Extraordinary expenses	0	0
Extraordinary items	0	0
Other taxes	40	33
Profit before income taxes	1,969	349
Income taxes	880	148
Net profit	1,089	201
DVFA/SG earnings per share (undiluted and diluted)	0.20	0.03
Number of shares (undiluted and diluted)	5,720,000	5,720,000

Income statement on a quarterly basis

Application of funds statement
--------------------------------	--	--

(in C '000)	Jan. 01 - Mar. 31, 2004	Jan. 01 - Mar. 31, 2003
Net profit/loss	1,089	201
Depreciation and amortisation	2,601	2,670
Extraordinary items	0	0
In/decrease in long-term accruals	150	150
In/decrease in the deferred reserves	- 87	- 112
Cashflow nach DVFA/SG	3,753	2,909
Result from investment disposals	- 29	- 24
In/decrease in inventories	- 254	- 682
In/decrease in debtors and other assets	- 5,735	- 3,082
In/decrease in short-term investments	0	3
In/decrease in prepayments and accrued income	60	177
In/decrease in further accruals	2,236	1,475
In/decrease in liabilities	868	407
Cashflow from current business activities	899	1,183
Additions to fixed assets	- 861	- 988
Proceed on disposal of fixed assets	29	52
Proceed on disposal of financial assets	11	0
Cashflow aus Investitionstätigkeit	- 821	- 936
In/decrease in current due to banks	- 156	- 1,780
Dividend payments	0	0
Cashflow from financing activities	- 156	- 1,780
In/decrease in current due to banks	- 78	- 1,533
Cash at banks and in hand as at Jan. 01	8,122	9,338
Cash at banks and in hand as at Mar. 31	8,044	7,805

Segment	Mar. 31, 2004	Mar. 31, 2003	Change (in %)
Germany
Sales	35,641	34,547	+ 3.2
Earnings before income taxes	1,795	217	+ 727.2
Export Sales Earnings before income taxes	6,801 174	6,113 132	+ 11.3 + 31.8
Full Company (AG)
Sales	42,442	40,660	+ 4.4
Earnings before income taxes	1,969	349	+ 464.2

Segment report for the first three months 2004

ment of changes in equity
State

	Subscribed capital	Capital reserve	Revenue reserve	Unappropriated	Total
As of Jan. 01, 2003	14,643	24,345	26,895	1,148	67,031
treasury stock reserve Withdrawal from			- 3	3
Dividend
Net profit				201	201
As of Mar. 31, 2003	14,643	24,345	26,892	1,352	67,232
As of Jan. 01, 2004	14,643	24,345	26,916	2,576	68,480
treasury stock reserve Withdrawal from
Dividend
Net profit				1,089	1,089
As of Mar. 31, 2004	14,643	24,345	26,916	3,665	69,569

Notes on the quarterly report for the period ended March 31, 2004

1. Accounting principles

The quarterly 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 quarterly 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.

3. Dividends

The Management Board and the Supervisory Board will propose payment of a dividend of C 0.28 per ordinary share (no dividend paid in previous year) and of C 0.34 per preference share (previous year: C 0.12) to the Annual General Meeting scheduled to take place in Rheda-Wiedenbrück on August 12, 2004.

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

At its meeting on May 11, 2004, the Supervisory Board decided to appoint Mr. Wilhelm Beckers who has been Head of the Doors/Frames division since December 2003 member of the Management Board with effect from June 1, 2004.

Financial schedule 2004/Current dates*

Press Release Interim report: 1st six months of 2003 May 12, 2004

Annual General Meeting (AGM) of shareholders in Rheda-Wiedenbrück Press Release Information regarding the results of the AGM

DVFA event/analysts' conference Financial Forum in Frankfurt

Report: 1st nine months of 2003

Press Release

August 31, 2004

August 12, 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