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Vienna, 26 August 2005

PRESS RELEASE NO. 4/2005

RISE IN SALES AND EARNINGS IN FIRST HALF OF 2005
MAJOR NEW PROJECTS IN THAILAND AND CHINA
NEW RECORD EARNINGS EXPECTED AGAIN IN 2005

The Semperit AG Holding industrial group continued on its growth course in the first half of 2005. As indicated in the mid-year report just released, consolidated sales increased on the same period the year before by some 5.1 % to € 257.1 million while profit before tax (PBT) rose by 3.7 % to € 28.1 million.

The Semperit management expects 2005 to see record annual consolidated sales and earnings for the fifteenth year in succession.

SEMPERIT AT A GLANCE

 

 

1-6 2001 1-6 2002 1-6 2003 1-6 2004 1-6 2005 Diff. 05/04
Sales in € million 198.5 222.3 234.7 244.6 257.1 + 5.1 %
profit before tax (PBT) in € mln 20.2 21.6 23.1 27.1 28.1 + 3.7 %
number of employees as of June 5,222 5,902 6,069 5.830 6,282 + 7.8 %

Demand in most segments was quite satisfactory on our markets yet there were excess capacities in the sector. This situation, coupled with the still fierce price competition, restricted the degree to which Semperit could pass on higher costs in sales prices.

The euro-to-dollar exchange rate continued to distort competition on the world market, putting an additional burden on Semperit business owing to our high volume of exports.

Nonetheless, we improved our earnings situation by pushing programs to optimize production processes and increase productivity.

 

Three new factories under construction in Asia
To improve our position on world markets, we began construction of three new production facilities in Asia:

Our first Chinese production site for hydraulic hose is currently going up in Shanghai. In its first configuration stage, the newly established subsidiary Semperflex Shanghai Ltd., will initially produce about 7 million meters p.a. for the Chinese and US markets. With a USD 30 million budget and USD 15 million in registered capital, this facility is one of the largest investment projects our group has ever undertaken.

The handrail production operations already existing at Shanghai Semperit Rubber & Plastic Products Co., Ltd will be moved to the property directly adjoining Semperflex and substantially expanded. These handrails are intended largely for the Chinese market. The geographic proximity of the two production sites creates utilizable synergies in machinery and personnel.

In Hat Yai, Thailand, we are currently building our third factory for medical examination gloves in the direct vicinity of our other two glove factories. The completion of this facility will significantly increase overall capacity. The first new production lines are scheduled to go on stream in the second half of the year.

 

Sempermed hampered by weak dollar
Capacity was well-utilized in the first half of the year at Sempermed, the group’s largest segment, accounting for some 36% of total consolidated sales. Massive cost-cutting programs brought about further improvements in our competitive position.

The rosy order situation for examination gloves increased the volume and value of sales at Sempermed Europe. Surgical glove production remained under pressure from the imports of competitors storming the European market from dollar countries. The market offensive we launched among European customers is showing initial positive effects, however.

The capacities at the two Thai factories of Siam Sempermed were utilized in full. However, the value of sales remained at last year’s levels due to ongoing price pressure and the unfavorable exchange rate in exports to North America.

The sharp upward rise in raw material and energy prices cut into profits at the Chinese vinyl glove factory of Shanghai Foremost. We are already making good progress in our steps to improve production efficiency and to cut costs at this site. Demand for rubber-free medical and industrial gloves in the US and Europe continued to grow, assuring a full utilization of capacities.

 

Dynamic growth at Semperflex
The dynamic trend at Semperflex (approx. 28% share in sales) continued unabated in the first half of the business year to assure another period of full utilization of production capacity.

Despite ever more aggressive price competition from low-wage countries, the hose production unit in Wimpassing, Austria, improved its position on the European markets in the first half of the year largely by pushing sales of hydraulic hose. The volume and value of elastomer sheeting sales was on target in spite of fiercer competition throughout Europe from the imports of producers from the Far East.

Full use was made of the capacities at the Czech hose factory Semperflex Optimit, which had been substantially increased in a major investment project. Sales of hydraulic hose reached a new record level. At the Italian subsidiary Roiter, restructuring of the sales operations in Italy improved the value of sales. Sales at the Thai hose factory of Semperflex Asia exceeded those at mid-year 2004 thanks to lively demand in the US and Europe. Capacity at this plant was also fully utilized.

 

Solid development at Semperform
Semperform (approx. 18% share in sales) reported somewhat weaker growth in the period under review.

In Wimpassing, sales figures for ropeway rings, profiles and filter membranes exceeded expectations, as did those for railway superstructure and ski technology. New business in handrails declined in Europe, as expected, but the segment more than offset this decrease with deliveries to the spare parts market.

Semperform Hungary did not achieve its targets for sales and earnings. The German construction profile manufacturer Semperit Gummiwerk Deggendorf unfortunately had to deal with a further contraction of the German construction market. To improve its market position in this difficult climate, the subsidiary stepped up its efforts to attract new foreign customers. The additional ultra-modern, high-performance extrusion plant went into full operation in the second quarter.

The Thai subsidiary Semperform Pacific reported a much improved course of business for the first half of the business year. The handrail factory in Shanghai also continued to develop positively.

 

Growth for Sempertrans in Poland and India
Growth at Sempertrans (approx. 18% share in sales) was propelled mainly by the group companies in Poland and India.

To sustain this expansion, the segment began installing a new production line for steel-cord and textile conveyor belts at the Polish conveyor belt manufacturer Sempertrans Belchatow. This new line will allow the company to tap new market segments.

The Indian subsidiary Sempertrans Nirlon continues profiting from the booming Indian market. Serious restructuring was undertaken at the French production company Sempertrans France Belting Technology (S.F.B.T.) to achieve an acceptable level of competitiveness in production conditions.

 

The mid-year report can be viewed effective immediately at www.semperit.at
You may also obtain the mid-year report at the following address:
Semperit AG Holding, Ms. Sabina Strassnig, Modecenterstrase 22,
A-1031 Vienna, Austria
Phone: ++43-1-79777-214. E-mail: sabina.strassnig@semperitgroup.com

Vienna, 26 August 2005

Contact

Monika Riedel
Director Group Communications and Sustainability
T +43 1 79777-620