GROUP QUARTERLY REPORT

GROUP QUARTERLY REPORT of CENTROTEC Hochleistungskunststoffe AG, Brilon at September 30, 2003 Report of the Management Board

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Highlights • Revenue up 13% • Rising market penetration generates profitable growth • EPS (pre goodwill) rise by a disproportionate 34.0% to EUR 0.76 • Disproportionate rise in profit after taxes (after goodwill) of 44% • EBIT increase (pre goodwill) up disproportionately by > 20%; EBIT margin (pre

goodwill) improves to 13.1% (previous year 12.2%) • First-time consolidation of Möller Medizintechnik at end of August 2003 Outlook • The renewed leap in organic growth in the second quarter reflects its robustness

for 2003 as a whole. • Revenue forecast remains at EUR 110 - 115 million; profits forecast remains at

EPS (pre goodwill) of EUR 1.00 – 1.05 • Integration of Möller Medical successfully under way, but contribution to this

year's result still slight • Continuing shift in strategic emphasis towards sustainability (environmental

protection, energy saving and health products) • Medium-term growth target of 20-30% p.a.


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1. Revenue: rise in 13 % - further market penetration fuels growth

Centrotec achieved a significant rise in revenue equivalent to a year-on-year 13% in the first nine months. Around half of this revenue growth stems from organic growth, with the acquisitions Möller and Ned Air as yet contributing a relatively small proportion of consolidated revenue at September 30, 2003, because these companies have only belonged to the group for one and three months respectively. After elimination of the new acquisitions, organic growth for the first 9 months of the year reached 6%. Within the third quarter (July 1 to September 30), organic growth reached 7% as against only 2% in the first and 10% in the second quarter. Including new acquisitions, growth in the third quarter reached 24%. This confirms the forecast made in the last report that the margin over the previous year's figures would continue to widen. These growth rates, which are relatively low for Centrotec, continue to reflect the weak state of the economy. Centrotec was again unable to identify any cyclically-driven growth stimuli in the third quarter. Rather, its positioning in the niche growth areas of energy-saving technology once again served as the basis of its successful performance. That the company continues to grow in spite of the stagnating overall markets is a sign that Centrotec products are enjoying increasing market penetration. Once the wider economic situation stabilizes, Centrotec will undoubtedly return to its accustomed double-digit rates of organic growth. Within the individual business segments of Centrotec AG, the Systems segment, the largest source of revenue, enjoyed an above-average rise in revenue from EUR 57.3 million to EUR 65.8 million (+ 14.7%). The familiar stronger seasonal revenue and profits in the second half of the year materialized as expected in the third quarter. In the smaller Engineering Plastics segment, there was likewise an increase in revenue from EUR 12.0 million to EUR 13.9 million (approx. 15%). Although the markets did not supply any evidence of an economic recovery, the cyclical situation does not appear to be deteriorating. This segment now also includes the new acquisition Möller Medical, whose positive contribution will become more apparent in the future as it has only been consolidated for the past four weeks.

2. Earnings: disproportionately high rise of 21.6% in EBIT pre-goodwill; net

earnings up by 44%

The niche positioning of the Centrotec Group in various markets involving sustainable, energy-saving, environmentally friendly technologies has once again prompted significant growth in earnings. Within EBIT pre-goodwill, earnings were boosted by 21.6% to EUR 10.7 million (previous year EUR 8.8 million). Earnings after interest and taxes actually rose by more 44% to EUR 4.4 million (previous year EUR 3.1 million). Earnings per share (EPS) pre-goodwill was boosted by approx. 34% from EUR 0.57 in the previous year to a current EUR 0.76. The higher earnings were achieved substantially in the Systems segment. However, the significantly smaller Engineering Plastics segment once again posted a year-on-year increase. This development inspires hope for the future.


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We anticipate very positive future developments within the sustainability sectors Climate Control/Gas Flue and Medical/Plastics Technology. Expectations for 2003 as a whole remain positive. Our previous targets remain valid, and we continue to expect a rise in EPS pre-goodwill to approx. EUR 1.00 – 1.05.

3. Balance sheet and CF: equity ratio maintained; operating cash flow trebled As a result of the takeovers, the balance sheet total rose from EUR 88 million to 114 million. The working capital (trade accounts receivable + inventories – trade accounts payable) rose predominantly as a result of the acquisitions, but also through seasonal factors, from EUR 21.4 million (at December 31, 2002) to EUR 29.3 million. Net amounts owed to banks (current and non-current loans less cash and cash equivalents) rose from EUR 36.5 million to EUR 52.0 million. This change has been driven essentially by the acquisitions of Ned Air and Möller and the rise in working capital. The equity ratio barely changed from the previous quarter, although a further acquisition was consolidated. It currently amounts to 28.1% (at June 30, 2003: 29.0%). Accumulated profits should push the figure over 30% by the end of the year. The increasingly common indicator of the dynamic gearing ratio (net financial liabilities/EBITDA) has scarcely changed since the previous year. This figure was 2.4 at December 31, 2002. At the end of 2003, it is expected to be in the region of 2.5 – 2.7 despite the acquisitions. The usual limit value adopted by banks as a measure of the stability of a company's profitability is around 4.0. "Cash flow I" (profit plus amortization) improved substantially from EUR 7.3 million to EUR 8.7 million. The cash flow from operating activities (including the change in working capital) almost trebled, rising from EUR 2.7 million to EUR 7.6 million.

4. Systems: revenue up by 15%; disproportionately sharp rise in earnings

The satisfyingly sharp rise in revenue for the Systems segment of around 15% at September 30, 2003 was towards the upper end of the anticipated range. After elimination of the acquisition Ned Air, organic growth amounted to 8%. This growth was fuelled in equal measure by higher revenue from gas flue systems for energy-saving heating systems and growing demand for energy-saving climate control systems. Within this context, the high double-digit rates of growth in France and Italy are a very positive sign. The condensing boiler systems on which our gas flue systems are based are now beginning to make advances in these countries, too. These countries offer bright prospects for a similar development to that which has already been witnessed in Germany and the Netherlands. Energy savings, reduced CO2 emissions and healthy climates remain the objectives of our research and development departments, which have succeeded in translating them into profitable, marketable solutions. The customary higher capacity utilization in the second half of the year and ongoing improvements prompted a disproportionately sharp jump in earnings. With a pre-tax result for the segment of approx. EUR 6.6 million, this area is a dependable source of profits for the group as a whole. Due to seasonal factors, the third quarter was once


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again stronger than the preceding two quarters, with the result that the outlook for the year as a whole is very bright.

5. Engineering Plastics – 15% rise in revenue

The revenue of the Engineering Plastics segment rose year on year by 15%. Here again, one new acquisition has been consolidated. Even after its elimination, organic growth was still 5%. In the context of falling prices and weak market demand, Centrotec has thus been able to record notable increases. Earnings have likewise made positive progress but remain below the level that Centrotec strives to attain. Further steps to enhance efficiency were taken in the past quarter, though a lasting upswing in earnings is not expected to materialize until the economy picks up again. In absolute terms, however, the earnings shortfall in this segment does not pose any threat to the group as a whole. Another factor which makes the longer-range outlook for this segment bright is the fact that the new area of medical technology represents a profitable new source of business. Development work on materials, products and projects continues in the pioneering field of advanced composites. The various development projects offer good prospects of further attractive orders.

6. CENTROTEC expands into medical technology with the takeover of Möller Feinmechanik GmbH & Co. KG, Fulda On the basis of the agreement dated August 28, 2003, CENTROTEC Hochleistungskunststoffe AG acquired all shares in Möller Feinmechanik GmbH & Co. KG (soon to be renamed Möller Medical GmbH & Co. KG), Fulda, from the Blum family of entrepreneurs. Möller was established in 1973, currently has 150 employees and generated profitable revenue of EUR 10 million in 2002. The acquisition, which is being financed without the need for a capital increase, will result in a rise of some EUR 7 million in financial liabilities (7 % of the balance sheet total). As no dilution is taking place, a positive contribution to earnings per share is anticipated, particularly from 2004. The impact of prorated consolidation on the Income Statement will remain relatively minor in 2003. With the purchase of Möller, CENTROTEC is implementing its strategy of systematically shifting its emphasis away from plastic processing and towards systems and final uses. CENTROTEC now generates over 80% of its revenue from systems, above all in the sector of energy-saving technology. The acquisition of Möller will now focus processing technology activities increasingly on assemblies and systems. CENTROTEC, which already supplies special plastics for medical technology, will be able to supply assemblies and systems for medical technology such as DNA analysis boxes, liposuction devices and blood pumps through Möller. The technology spectrum spans precision machining of hi-tech plastics, laser processing, clean-room


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production, electronic control technology and nanotechnology. Möller's clients are leading manufacturers of medical apparatus. The market for medical technology is currently growing at an annual rate of 8%. The driving forces behind this growth are the rising age of the population, the demand for higher standards of medical care and the pressure to cut costs in the healthcare sector through increased use of technology. CENTROTEC is planning to achieve significantly higher rates of growth in this market. Möller, which until now has operated predominantly within Germany, is to be included in CENTROTEC's internationalization strategy. CENTROTEC in addition intends to step up its expansion in the field of medical technology through further takeovers.

7. Positive expectations for the year as a whole – forecasts very stable

In the Systems segment, the expected positive trend in revenue and earnings materialized in the first three quarters, once again underlining our dynamic growth in the field of sustainable, environmentally friendly technologies. On the basis of the exceptionally strong third quarter, it is reasonable to assume that revenue and earnings for the year as a whole are very likely to lie within the target corridor. The target for the year as a whole, with a revenue target of EUR 110-115 million (previous year EUR 98.4 million) and EPS (pre-goodwill) of EUR 1.00-1.05 (previous year EUR 0.76), remains valid. Brilon, November 2003 The Management Board

KEY FIGURES GROUPof CENTROTEC Hochleistungskunststoffe AG, Brilon

at September 30, 2003in thousand EUR

30.09.2003 Previous ChangeYear**

Total sales 81.800 72.305 13,1%Engineering Plastics 13.863 12.024 15,3%Plastic Systems 65.799 57.345 14,7%Others 2.138 2.936 -27,2%

EarningsCash flow I (net income and depreciation/amortization) 8.690 7.321 18,7%EBIT (adjusted*) 10.722 8.817 21,6%EBIT 9.311 7.550 23,3%Net income (adjusted*) 5.850 4.347 34,6%Net income 4.439 3.080 44,1%Earnings per share (basic, adjusted*) 0,76 0,57 34,0%Earnings per share (basic) 0,58 0,40 44,9%Earnings per share (diluted) 0,58 0,40 44,9%Weighted average shares outstanding (basic) 7.661.935 7.660.122 0,0%Weighted average shares outstanding (diluted) 7.661.935 7.660.122 0,0%

EmployeesTotal (FTE) 864 624 38,4%Personnel expenses 20.307 18.317 10,9%

Capital structureEquity 32.001 27.703 15,5%Total capital 113.924 87.859 29,7%Equity ratio 28,1% 31,5% -10,9%

Investments/depreciation and amortizationInvestments in tangible assets 4.991 2.826 76,6%Depreciation of tangible assets and intangible assets (excluding goodwill) 2.840 2.974 -4,5%Amortization of goodwill 1.411 1.267 11,4%

* Amortization of goodwill eliminated** Category sales, net income, employees and investments/depreciations for the period from january 1 to september 30, 2002; Category capital structure per december 31, 2002

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CONSOLIDATED BALANCE SHEETof CENTROTEC Hochleistungskunststoffe AG, Brilon

at September 30, 2003in EUR

ASSETS30.09.2003 31.12.2002

Current assets

Cash and cash equivalents 2.390.859,08 3.172.134,99Trade account receivables 18.614.689,93 13.535.280,25Inventories 17.439.167,46 13.931.078,20Prepaid expenses and other current assets 2.576.365,53 2.114.356,46Income tax receivables 1.003.669,73 443.768,89

42.024.751,73 33.196.618,79

Noncurrent assets

Property, plant and equipment 33.600.940,99 27.163.023,29Intangible assets 489.743,03 450.511,40Financial investments 39.670,58 33.576,07Notes receivable / loans 45.922,56 45.922,56Goodwill 36.688.776,20 26.091.245,71Deferred tax 1.034.629,53 877.773,73

71.899.682,89 54.662.052,76

113.924.434,62 87.858.671,55

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CONSOLIDATED BALANCE SHEETof CENTROTEC Hochleistungskunststoffe AG, Brilon

at September 30, 2003in EUR

EQUITY AND LIABILITIES30.09.2003 31.12.2002

Current liabilities

Current portion of capital lease obligation 145.491,76 104.343,44Short term debt and current portion of long-term debt 21.752.237,25 15.426.493,88Trade accounts payable 6.778.281,42 6.095.962,46Accrued expenses 2.809.665,74 2.702.232,58Income tax payable 2.423.791,52 1.451.371,34Other current liabilities 12.543.614,67 6.849.940,35

46.453.082,36 32.630.344,05

Noncurrent liabilities

Long-term debt less current portion 32.606.115,82 24.828.333,02Capital lease obligations less current portion 203.614,85 187.726,30Deferred tax 2.086.296,19 2.152.395,85Pension accrual 574.238,64 356.510,19

35.470.265,50 27.524.965,36

Shareholders` equity

Share capital 7.667.975,00 7.667.975,00Additional paid-in-capital 10.127.858,32 10.127.858,32Treasury stock (112.394,90) (112.394,90)Currency translation reserve (277.769,56) (136.110,36)Retained earnings / accumulated deficit 10.156.034,07 6.007.789,89Accumulated consolidated income / loss 4.439.383,83 4.148.244,19

32.001.086,76 27.703.362,14

113.924.434,62 87.858.671,55

SHAREHOLDERS' EQUITY

in thousend EUR Share Addid. paid- Treasury Curr. translation Retained Accumulated Consolidated-capital in capital stock diff. in share- earnings income equity

holders' equityDecember 31, 2001/January 1, 2002 7.222 6.036 (112) 33 6.008 0 19.187Consolidatedincome / loss 4.148 4.148Changes in cause of theexercise of acquisition Brink 446 4.092 4.538Currency translation (169) (169)December 31, 2002 7.668 10.128 (112) (136) 6.008 4.148 27.703Allocation toretained earnings 4.148 (4.148) 0January 1, 2003 7.668 10.128 (112) (136) 10.156 0 27.703Consolidatedincome / loss 4.439 4.439Currency translation (142) (142)September 30, 2003 7.668 10.128 (112) (278) 10.156 4.439 32.001

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CONSOLIDATED INCOME STATEMENTof CENTROTEC Hochleistungskunststoffe AG, Brilon

for the period from January 1 to September 30, 2003in EUR

INCOME STATEMENT01.01.2003 01.01.200230.09.2003 30.09.2002

Revenues 81.800.403,91 72.304.968,55

Other operating income 458.833,69 125.027,35Changes in inventories of finished goods and work in progress 878.547,79 864.953,37Production for own fixed assets capitalized 28.945,64 60.571,21Cost of purchased materials and services (36.523.398,05) (32.193.592,97)Personnel expenses (20.306.818,67) (18.316.797,86)Depreciation and amortization (2.840.117,59) (2.973.779,83)Amortization (and impairment) of goodwill (1.410.815,07) (1.266.932,83)Other operating expenses (12.774.379,10) (11.054.338,32)

Operating income/loss 9.311.202,55 7.550.078,67

Interest income and expenses (1.804.458,19) (1.849.751,10)

Result before income taxes (and minority interest) 7.506.744,36 5.700.327,57

Income tax (3.067.360,53) (2.619.959,34)

Net income / loss 4.439.383,83 3.080.368,23

EARNINGS PER SHARE

Earnings per share (basic, adjusted*) 0,76 0,57Earnings per share (basic) 0,58 0,40Earnings per share (diluted) 0,58 0,40Weighted average shares outstanding (basic) 7.661.935 7.660.122Weighted average shares outstanding (diluted) 7.661.935 7.660.122

* Amortization of goodwill eliminated

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CONSOLIDATED INCOME STATEMENTof CENTROTEC Hochleistungskunststoffe AG, Brilon

for the period from July 1 to September 30, 2003in EUR

INCOME STATEMENT01.07.2003 01.07.200230.09.2003 30.09.2002

Revenues 30.067.474,56 24.339.267,71

Other operating income 193.562,77 4.448,45Changes in inventories of finished goods and work in progress (174.489,34) (188.915,87)Production for own fixed assets capitalized 19.116,91 39.956,78Cost of purchased materials and services (12.709.143,50) (10.469.240,57)Personnel expenses (7.498.584,69) (6.083.463,21)Depreciation and amortization (976.238,07) (986.007,52)Amortization (and impairment) of goodwill (538.000,61) (422.310,27)Other operating expenses (4.359.176,49) (3.381.860,75)

Operating income/loss 4.024.521,55 2.851.874,75

Interest income and expenses (684.706,90) (602.499,50)Other income / expenses 0,00 0,00

Result before income taxes (and minority interest) 3.339.814,65 2.249.375,25

Income tax (1.248.982,68) (1.101.372,60)

Net income / loss 2.090.831,97 1.148.002,65

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CONSOLIDATED CASH FLOW STATEMENTof CENTROTEC Hochleistungskunststoffe AG, Brilon

for the period from January 1 to September 30, 2003in thousand EUR

CASH FLOW STATEMENT01.01.2003 01.01.200230.09.2003 30.09.2002

Net income before taxes and interest 9.311 7.550Depreciation 4.251 4.241Gain/loss on disposal of

non-current assets 0 0Other non-cash items 0 0Increase/decrease in provisions (225 ) 31Increase/decrease

in inventories, trade receivables and other assets thatcannot be allocated to investing or financing activities (3.500 ) (3.409 )

Increase/decreasein trade payables and other liabilities thatcannot be allocated to investing or financing activities 1.923 (2.908 )

Interest paid (1.733 ) (1.458 )Income taxes paid (2.397 ) (1.372 )Cash Flow from operating activities 7.630 2.675

Acquisition of share in participations - net of cash acquired (14.116 ) (21.738 )Purchase of property, plant and equipment/

intangible assets (5.718 ) (2.993 )Proceeds from disposal of property, plant and

equipment/intangible assets 231 418Cash Flow from investing activities (19.603 ) (24.313 )

Proceeds from issuance of shares (0 ) 4.538Proceeds from

borrowings/repayment of borrowings 5.810 13.270Acquisition of treasury shares 0 0Cash Flow from financing activities 5.810 17.808

Change in liquid funds (6.163 ) (3.830 )Liquid funds at the beginning of the financial year (2.591 ) (1.625 )Liquid funds at the end of the financial quarter (8.754 ) (5.455 )

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GROUP QUARTERLY REPORT of CENTROTEC Hochleistungskunststoffe AG, Brilon at September 30, 2003 Explanatory Notes

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1. Rendering of accounts

This Quarterly Report has been drawn up in accordance with the International Accounting Standards (IAS) and the guidelines of Deutsche Börse AG on "Structured Quarterly Reports".

2. Changes in the composition of the company's structure

The composition of the company's structure has changed since the last annual financial statements. Effective as of 1 June 2003 the new Dutch acquisition Ned Air and effective as of August 28, 2003 the new German acquisition Möller Medical was consolidated for the first time.

3. Contingent liabilities There has been no significant change in contingent liabilities since the balance sheet date.

4. Details of dividend payments and equity measures

No dividend payment is envisaged for the reporting period. 5. Reportable security holdings

Name Shares / Options / total total*Management Board Dr. Gert-Jan Huisman 500 107,084 Dr. Alexander Kirsch 14,000 115,279 Martin Beijer 700 104,639 Rob Slemmer 0 43,659 Supervisory Board Guido A. Krass 1,200,000 0 Dr. Bernhard R. Heiss 0 0 J. Willem Brink 0 0 Centrotec Treasury stock** 6,040 0

* The maximum possible number of options has been indicated. How many options can actually be exercised depends on the attainment of individually specified targets.


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** pursuant to § 160 Paras. 1 and 5 of German Stock Corporation Law (AktG) 6. Employees

The total number of employees (FTE = Full Time Equivalents) at the interim reporting

date was 864 (previous year 624). This rise stems principally from the acquisitions Ned Air and Möller.

7. Composition of Supervisory Board and Management Board There have been no changes to the line-up of the Supervisory Board and Management

Board since the last quarterly report. 8. General business progress

During the period under review, revenue of EUR 81.8 million (previous year EUR 72.3 million) was recorded, with EBIT before goodwill totalling EUR 10.722 million (previous year EUR 8.817 million). The rise in revenue compared with the prior-year period is 13.1%. The operative cash flow was EUR 7.6 million (previous year EUR 2.6 million). Cash flow 1 (profit plus amortization) totalled EUR 8.7 million and was consequently some 19% up on the prior-year figure (EUR 7.3 million). Personnel expenses at the reporting date showed a disproportionately high rise compared with September 30, 2002. This was because companies with a high level of value creation (higher proportion of personnel costs, lower proportion of material costs) have been acquired in the meantime.

9. Segment report The company is organised into the "Engineering Plastics" and "Systems" segments.

EUR thousand Engineering Plastic Other Total Consoli- Consoli-

Plastics

Systems

Segments

dation

dated accounts

Revenues 14,954 67,961 2,216 85,131 (1,964) 83,167 Expenses (14,625) (61,397) (1,436) (77,458) 1,798 (75,660) Accounting profit 329 6,564 780 7,673 (166) 7,507


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10. Research and development activities Development activities concentrated on sustainable technologies in the fields of

environmental trends, energy saving and the reduction of CO2 emissions, and spanned the segments of Systems and Engineering Plastics.

In the medical technology area, a new blood blending weigher for blood banks was

unveiled in the past quarter. With the aid of a novel, comprehensive data retrieval system, it is able to ensure that no blood sachets can be confused. It is consequently the first product that fully complies with the requirements of the new blood transfusion legislation.

11. Capital expenditure Capital expenditure on property, plant and equipment amounted to EUR 5.0 million at

the reporting date and thus showed an increase of EUR 2.2 on the previous year. This year, there was capital expenditure of a one-off nature for new properties in Brilon and Lyons. Additional machinery and plant was moreover purchased for the various business areas as part of the investment plan.

12. Outlook for the year as a whole Following the renewed rise in revenue in the third quarter compared with the two

preceding quarters, as matters stand the targets for 2003 as a whole will be achieved. The revenue targets envisaged at the start of the year, with year-on-year growth of 10-

15% and EPS targets of EUR 1.00 – 1.05 (before goodwill), consequently remain valid. The medium-term plans currently likewise appear to be attainable. We are consequently anticipating medium-term growth in the region of 20 to 30%.

Am Patbergschen Dorn 9 – D-59929 Brilon

Tel.: +49(0)2961.96631-0

Fax: +49(0)2961.96631-60

www.centrotec.de – [email protected]

GROUP QUARTERLY REPORT

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