Westag AG — Interim / Quarterly Report 2005

Aug 11, 2005

Interim Report

1st six months of 2005

Sales

According to the figures released by the Federal Statistical Office, incoming orders in the German building construction sector continued to decline in 2005, shrinking by 10.0 % between January to May. Despite this challenging environment Westag & Getalit AG was able to largely maintain its level of half-year sales which came in at € 82.6 million, compared to € 84.2 million in the same period of 2004 (-1.8 %).

Export sales rose by 15.4 % to € 16.3 million. The export share stood at 19.8% in the first half of the year, meaning that we have effectively reached the 20 % export share repeatedly pointed to in our guidance. All three divisions contributed double-digit growth rates to this result.

Divisions

Sales revenue (in C '000)	Jan. 01 - Jun. 30, 2005	Jan. 01 - Jun. 30, 2004	Change (in %)
Plywood/Shuttering	12,927	13,047	- 0.9
Doors/Frames	33,827	34,789	- 2.8
Laminates/Elements	34,081	34,389	- 0.9

In particular, the Plywood/Formwork Division was able to offset the continued sluggishness in the domestic business by a strong 25.6 % expansion of its export business. The Division's total sales declined only slightly by 0.9 %.

The Doors/Frames Division recorded a 2.8 % contraction of its sales. Lower demand for warehouse doors was partly compensated for by growth in the contract business and, specifically, by higher demand for white enamelled doors.

The sales contribution by Laminates/Elements Division shrank slightly by 0.9 %. A more pronounced decline was prevented by clearly increased sales of our Getacore acrylic based solid surface worktops.

Result

Earnings before income taxes in the first half of 2005 amounted to € 1,460 thousand, which was clearly lower than in the same period of the previous year (€ 3,246 thousand). This development was chiefly caused by considerably higher raw materials prices. DVFA/SG earnings per share were down to € 0.16 (2004: € 0.37).

Profit data (in C '000)	Jan. 01 - Jun. 30, 2005	Jan. 01 - Jun. 30, 2004	Change (in %)
Result from ordinary activities	1,179	2,997	- 60.7
Earnings before income taxes	1,460	3,246	- 55.0
Net profit	907	1,948	- 53.4
Net profit per share (in C)	0.16	0.34	- 52.9
DVFA/SG earnings per share (in C)	0.16	0.37	- 56.8

Investments

Investments in an amount of € 11.3 million are planned for 2005. The biggest single investment involves a machine for continuous production of decorative high-pressure laminates. Other investments mainly include spending on replacements and rationalisation.

Employees

Workforce	Jun. 30,	Jun. 30,	Change
	2005	2004	(in %)
Number of employees (incl. trainees/apprentices)	1,209	1,232	- 1.9

As of June 30, 2005, Westag & Getalit AG employed 1,209 people. Personnel expenses as a percentage of sales stood at 34.6 % (2004: 34.7 %).

Outlook

The situation in our industry remains characterised by oversupply and a continuing lack of positive stimulation for consumers to give up their spending restraint.

All the indications are that demand in Germany will remain weak. We therefore seek to lower our personnel expense ratio even further by way of additional rationalisation measures as well as through the agreement of more flexible working hours. The third quarter of the year brought the first declines in raw materials prices and we hope that this trend will continue.

Notwithstanding the pressure on our prices, we believe that current developments support our expectation of appropriate earnings to be reported also for the full financial year, even though it will not be possible to match the very good profit level of the previous year.

Rheda-Wiedenbrück, August 2005

Westag & Getalit AG The Management Board

Balance sheet

(in €'000)	Jun. 30, 2005	Jun. 30, 2004
Intangible assets	435	259
Tangible assets	42,957	42,249
Financial assets	51	103
Non-current assets	43,443	42,611
Inventories	30,476	27,189
Debtors and other assets	20,021	18,021
Cash at banks or in hand	18,540	20,779
Current assets	69,037	65,989
Deferred tax assets	0	0
Total assets	112,480	108,600
Called-up share Capital	14,643	14,643
Capital reserve	24,345	24,345
Revenue reserves	29,518	29,480
Net profit attributable to shareholders	5,005	4,098
Total equity	73,511	72,566
Non-current liabilities	14,790	14,508
Current liabilities	24,146	21,457
Deferred tax liabilities	33	69
Total equity and liabilities	112,480	108,600

Income statement on a quarterly basis

(in € '000)	Apr. 01 - Jun. 30, 2005	Apr. 01 - Jun. 30, 2004
Sales	41,938	41,714
In/decrease in inventories	376	127
Own work capitalised	75	43
Total operating performance	42,389	41,884
Other operating income	329	448
Cost of materials	20,726	19,057
Personnel expenses	14,409	14,627
Depreciation and amortisation	1,995	2,601
Other operating expenses	5,022	4,785
Other taxes	41	40
Operating result	525	1,222
Financial result	126	142
Investment result	0	0
Extraordinary items	0	0
Profit before income taxes	651	1,364
Income taxes	245	452
Net profit	406	912
DVFA/SG earnings per share (undiluted and diluted)	0.07	0.17
Number of shares (undiluted and diluted)	5,720,000	5,720,000

(in € '000)	Jan. 01 - Jun. 30, 2005	Jan. 01 - Jun. 30, 2004
Sales	82,634	84,156
In/decrease in inventories	1,800	574
Own work capitalised	87	76
Total operating performance	84,521	84,806
Other operating income	788	802
Cost of materials	41,044	38,378
Personnel expenses	29,222	29,433
Depreciation and amortisation	4,189	5,202
Other operating expenses	9,594	9,519
Other taxes	81	79
Operating result	1,179	2,997
Financial result	281	249
Investment result	0	0
Extraordinary items	0	0
Profit before income taxes	1,460	3,246
Income taxes	553	1,298
Net profit	907	1,948
DVFA/SG earnings per share (undiluted and diluted))	0.16	0.37
Number of shares (undiluted and diluted)	5,720,000	5,720,000

Income statement on half-year basis

Cash flow statement

(in €'000)	Jan. 01 - Jun. 30, 2005	Jan. 01 - Jun. 30, 2004
Operating result/EBIT	1,179	2,997
Income tax payments	- 744	- 586
Depreciation and amortisation	4,189	5,202
Result from asset retirements	- 75	- 60
Change in current assets	- 2,322	- 3,834
Change in liabilities	3,089	5,007
Cash flow from operating activities	5,316	8,726
Investments in fixed and financial assets	- 5,147	- 2,331
Change in financial assets	51	12
Income from fixed asset retirements	145	104
Cash flow from investment activities	- 4,951	- 2,215
Interest income	388	443
Interest expenses	0	- 20
Repayment of non-current financial liabilities	0	- 151
Acquisition/sale of own shares	0	120
Dividend payments	0	0
Cash flow from financing activities	388	392
Change in liquid funds	753	6,903
Liquid funds as of Jan. 01	8,436	8,122
Liquid funds as of Jun. 30	9,189	15,025

Segment report for the first six months 2005
----------------------------------------------	--	--	--	--	--

Segment (in € '000)	Jan. 01 - Jun. 30, 2005	Jan. 01 - Jun. 30, 2004	Change (in %)
Germany Sales Earnings before income taxes	66,294 1,133	70,031 2,806	- 5.3 - 59.6
Export Sales Earnings before income taxes	16,340 327	14,125 440	15.7 - 25.7
Full Company Sales Earnings before income taxes	82,634 1,460	84,156 3,246	- 1.8 - 55.0

Statement of changes in equity

in € '000	Subscribed capital	Capital reserve	Revenue reserve	Net profit for the year	Total
As of Jan. 01, 2004	14,643	24,345	26,723	2,577	68,288
Transfer to other reserve			- 7		- 7
Change in own shares				120	120
Dividend					0
Net profit				1,948	1,948
As of Jun. 30, 2004	14,643	24,345	26,716	4,645	70,349
As of Jan. 01, 2005	14,643	24,345	29,480	4,098	72,566
Transfer to other reserve			38		38
Change in own shares					0
Dividend					0
Net profit				907	907
As of Jun. 30, 2005	14,643	24,345	29,518	5,005	73,511

Notes on the report for the six-month period ended June 30, 2005

1. Accounting principles

The interim report of Westag & Getalit AG for the six-month period ended June 30, 2005 is prepared to International Financial Reporting Standards (IFRS). The previous year's figures have been adjusted accordingly. All standards applicable as of the closing date were applied in the form relevant for Westag & Getalit AG.

2. Cash flow statement

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

3. Liquid funds

Liquid funds shown in the balance sheet include securities in an amount of € 9,351 thousand (Dec. 31, 2004: € 12,211 thousand).

1. Composition of subscribed capital

The subscribed capital of € 14,643 thousand is composed of 2,860,000 no-par ordinary shares and 2,860,000 non-voting nopar preference shares with a total value of € 7,321,600.

5. Purchase commitments

As of Jun 30, 2005, purchase commitments amounted to € 11,666 thousand, compared to € 4,032 thousand in the previous year.

Financial schedule 2005/Current dates*

Press Release Annual Financial Statements 2004

Annual Press Briefing in Düsseldorf Press Release Report on the first three months of 2005

Annual General Meeting (AGM) of Shareholders in Rheda-Wiedenbrück Press Release Interim report on the first six months of 2005

DVFA Event/Analysts' Conference in Frankfurt

Press Release Report on the first nine months of 2005 March 17, 2005

May 11, 2005

August 9, 2005

August 31, 2005

November 8, 2005

* The complete 2005 financial calendar is available on the Internet at:

www.westag-getalit.de/finanzkalender

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