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Higher sales in the third quarter – result suffers from higher raw material prices – restructuring on track

Eglisau / Zurich, October 25, 2005

In the first nine months of 2005, Forbo reached sales of CHF 1,266.6 million, 2.2 % higher than in the corresponding period of the previous year. Raw material prices continued to rise in the third quarter and had a negative impact on the result. The restructuring measures are on track.

Forbo recorded sales of CHF 1,266.6 million in the first nine months of the current business year. Compared with the previous year, this represents an increase of 2.2 % in Swiss Francs or 2.7 % in local currencies. At CHF 560.8 million, the flooring business showed a slight decrease by 0.6 % (0.5 % in local currencies), in contrast with increases in the other businesses. The adhesives business recorded 5.0 % sales growth (5.7 % in local currencies) to CHF 465.3 million, partly due to higher sales prices. The belting business increased sales by 3.9 % (4.8 % in local currencies) to CHF 240.5 million.

At CHF 437.2 million, Group sales in the third quarter are 6.2 % (4.6 % in local currencies) higher than in the third quarter 2004. Notably the adhesives business (+ 10.9 %) and the belting business (+ 8.7 %) contributed to this development. The flooring business recorded a sales plus of 1.5 %. All in all, third quarter sales were positively influenced compared with the previous year, by the stronger US Dollar and the stable Euro.

Raw material prices that had risen sharply in the first half-year already continued to go up and could only partly be passed on to the products. This had a considerably negative effect on margins, especially in the adhesives business.

The restructuring measures are making progress as planned. The announced need for special charges of some CHF 40 million for can be maintained.

Provided the economic conditions continue to be positive, Forbo is expecting slightly higher sales for the entire business year compared with the previous year and a positive result before special charges.

Forbo is a leading producer of floor coverings, adhesives, and beltings. The company with head office in Eglisau, Switzerland, employs some 5,500 people and has an international network of production companies and sales organizations in a total of 31 countries. In 2004 the Group reached sales of CHF 1,622.3 million The holding company – Forbo Holding AG – is listed at the SWX Swiss Exchange (securities number 354'151, Bloomberg FORN SW, Reuters FORN S). Further information can be found at www.forbo.com.

Contact:

Corina Atzli
Head of Corporate Communications
Tel: + 41 44 868 25 69
Fax: + 41 44 868 35 69


Gerold Zenger
Chief Financial Officer
Tel: + 41 44 868 25 25
Fax: + 41 44 868 25 2