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Sales on previous year's level, Results well up

Eglisau, January 22, 1999

The Group sales in 1998 at CHF 1'830 million shows a decrease of 10% compared to previous year. This decrease is a result of the divestments in 1997 as well as the restructuring activities in 1998. After eliminating the effect of these divestments and the foreign exchange influences, the effective growth in real terms of sales is 1%.

The following comments relate to the changes in real terms.

The small sales decrease in Flooring is entirely due to Wallcoverings (-18%) which is in-cluded therein. In spite of a generally slack demand for floorcoverings in Western Europe, both lino-leum and textile floorcoverings achieved increases in sales of 3% and 2%, respectively. In contrast, vinyl floorcoverings suffered a decrease of 5% because of the normally weaker second year of the cushion vinyl collection cycle and a softening of demand in the last quarter.

The 18% decrease in wallcoverings sales is mainly a result of the current year's final restructuring in the UK and USA. The remaining activities had been integrated into Forbo CP Ltd. (UK) to comple-ment their profitable and strongly growing retail offer of decorative products.

In the Industry Specialties business all activities contributed to an overall 5% increase in sales. Technical coatings were up by 2%. The increase in sales in North America did more than compen-sate the decrease in the Far East. In the adhesives technology activities, strong demand, especially in Germany and the Netherlands, resulted in an increase in sales of 7%. Decorative films and pro-files developed very positively achieving a sales increase of 13%.

As already announced earlier, the expected Group net income should be significantly above that achieved last year.

At their meeting on 20 January 1999 the Board of Directors of Forbo Holding SA appointed their Deputy Chairman, Karl Janjöri, as Chairman of the Board to succeed the late Dr. René K. Ruepp who died in December 1998. At the same time, Dr. Willy Kissling was appointed as Deputy Chairman of the Board.

Dates
Press conference 1998 results: 29.03.1999, 1030 h
Presentation to financial analysts: 29.03.1999, 1430 h
Annual General Meeting: 27.04.1999, 1600 h