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Sales growth through acquisitions

Eglisau, January 31, 2003

In the business year 2002, the Forbo Group achieved net sales of CHF 1 531 million, 13.1 % more than in the previous year excluding the carpets business sold in October 2001. The increase is the result of the acquisition of the Swift adhesives business in April 2002. The difficult economic conditions and adverse currency movements had a negative impact on sales and profits. The Forbo Group with worldwide activities in the fields of floor coverings, drive and conveyor belts and adhesives expects its 2002 operating results to be close to the previous year's level.

With net sales of CHF 736 million, floor coverings recorded a decline of 3.1% in local currencies or 6.1% translated into Swiss Francs, compared with the previous year. With net sales of CHF 372 million, the decrease in local currencies is 3.7% in the linoleum business. Here, reduced public spendings in hospitals, schools and other public buildings in key European countries are highly noticeable. North America, however, continues to be a growth market with a 6.9% increase. With vinyls, Forbo reached net sales of CHF 308 million, 2.0% less than in the previous year in local currency. Also in the fourth quarter, further sales growth in Eastern Europe, Southern Europe and Asia partly compensated the weak results in Northern and Western Europe.
The global business with belting recorded net sales of CHF 308 million. In local currency, this corresponds with a 5.7% decrease, or 11.4% in Swiss Francs. The pronounced currency effect is due to the high sales percentage of Dollar-based markets. Business in North America and Asia was somewhat better than in Europe. In the fourth quarter of 2002, activities continued to gain momentum, as was already the case in the previous quarter.

The adhesives business reached net sales of CHF 487 million, increasing its significance in the Forbo portfolio. Of the total figure, CHF 247 million were recorded by the Swift activities acquired in April 2002; their integration into the existing adhesives business has made good progress. Even excluding Swift, the adhesives business continued its growth course in the past year with an increase of 8,2% and 5,4% in local currency and Swiss Francs, respectively.

Based on the sales development of linoleum that was below expectations in the fourth quarter, and the substantial weakening of the Dollar exchange rate, operating profit nearly on the previous year's level (CHF 88.9 million) can be expected after goodwill amortization of some CHF 6 million for the Swift acquisition. Due to higher charges for financing and tax, the net profit is expected to be somewhat lower than in the previous year (CHF 51.8 million). Forbo will inform in detail about the financial statements at the media conference on March 25, 2003.

Floor coverings new as Forbo Flooring
Effective February 1, 2003, a new leadership and organizational structure has been implemented in the flooring business. Under the new Executive Board member Martin Richenhagen, the group businesses of linoleum and vinyls so far managed separately, will be consolidated in a single business unit which will operate worldwide under the name of Forbo Flooring. The streamlining of the group organization aims at enhancing the international market presence and cutting costs.

Forbo is a global manufacturer of flooring, adhesives as well as conveyor and drive belts. The Group employs some 5700 people worldwide and has an international network of 40 production companies and 80 marketing organizations in 30 countries.

Contact:

Ursula Leonhard
Head of Corporate Communications
Tel: + 41 1 868 25 69
Fax: + 41 1 868 35 69

Gerold Zenger
Chief Financial Officer
Tel: + 41 1 868 25 25
Fax: + 41 1 868 25 26