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Please find below all Forbo media releases listed by year.

Media release half-year report 2005

Sales maintained – Auctioning process leaves traces – Group loss in line with expectations

Eglisau / Zurich, August 23, 2005

In the first half-year 2005, Forbo achieved net sales of CHF 829.4 million (previous year: CHF 827.0 million). The operating result (EBIT) after special charges amounts to CHF 15.4 million compared with CHF 29.6 million in the previous year. For the entire year, Forbo is expecting slightly higher sales than in the previous year and a positive result before special charges.

In the first half-year 2005, Forbo recorded a slight increase in net sales by 0.3 % (1.8 % in currency-adjusted terms) over the previous year. The lengthy auctioning process that lasted until April 2005 had a negative impact on the first half-year figures. The high non-recurring costs of the process itself also affected the Group results. The profit-enhancing measures planned in fall 2004, which had been seriously delayed by the auctioning process, were resumed and intensified in the second quarter by the new Board of Directors and the Executive Board. The first positive effects of these measures will manifest themselves in the second half-year at the earliest.

The sales decline in the first quarter could be largely offset by clearly higher sales in the second quarter. In addition, the stronger US Dollar and the stable Euro resulted in a slight improvement of the currency situation. As far as costs were concerned, especially the adhesives business suffered from high raw material prices that could not be completely transferred to the products.

The operating profit before depreciation and amortization (EBITDA) decreased to CHF 47.9 million (previous year: CHF 79.2 million) as a result of the direct costs of the auctioning process (CHF 5.9 million) and restructuring charges (CHF 15.1 million). The operating profit after depreciation and amortization (EBIT) is CHF 15.4 million, CHF 14.2 million lower than in the previous year. Before special charges, the operating profit decreased by CHF 3.7 million to CHF 30.5 million compared with the previous year. The positive effects due to goodwill amortization, which used to be reflected in the operating profit but is no longer admissible according to IFRS, amount to CHF 4.9 million.

The Group loss is CHF 6.1 million (previous year: Group loss of CHF 16.2 million). The loss includes special charges of CHF 15.1 million (previous year: CHF 20.0 million).

Development by businesses
The flooring business achieved sales of CHF 370.8 million or 1.6 % (in local currencies 0.8 %) less than in the corresponding period of the previous year. The operating profit (EBIT) before special charges at CHF 20.0 million is CHF 0.5 million higher than in the previous year as a result of the lower depreciation of fixed assets.

The adhesives business increased sales by 2.1 % (4.0 % in local currencies) to CHF 302.7 million compared with the corresponding period of the previous year. At CHF 19.1 million, the operating result (EBIT) before special charges is above the previous year’s result of CHF 17.9 million due to goodwill amortization and amortization of other intangible assets (CHF 4.2 million) that is no longer admissible according to IFRS.

In the first half-year 2005, the belting business recorded a sales plus of 1.5 % (3.7 % in local currencies) to CHF 155.9 million. The operating result (EBIT) before special charges and lower depreciation of fixed assets is CHF 3.4 million, meaning that it is still unsatisfactory (previous year: CHF 1.0 million).

The half-year report 2005 contains further information on the development of the three businesses.

Changes in the Executive Board
Effective January 1, 2006 Gerold A. Zenger, CFO and member of the Forbo Executive Board for many years, will become Deputy of the CEO and at the same time manage the Business Unit Corporate Services. His successor as CFO has been appointed and will be announced in October in coordination with his current employer.

Dr. Jan Lipton, Executive Board member and responsible for the belting business, will retire from the company. We thank Dr. Jan Lipton for his services during five years and his important contribution to the restructuring of the belting business.

His successor is Matthias Hünerwadel. He will concentrate on the implementation of the strategy and the associated increase in profitability. Matthias Hünerwadel has held various management positions in the Franke Group for ten years. His latest role was manager of Franke Foodservice Systems Europa.

Relocation of the Forbo Holding AG head office to Baar
In the context of the ongoing reorganization, it is Forbo’s intention to relocate its Corporate Headquarters and the registered office of Forbo Holding AG to Baar in the canton of Zug within the next 12 months.

Assuming that today’s positive market environment continues, Forbo expects for the entire business year slightly higher sales than in the previous year and a positive result before special charges. The profit-enhancing measures resumed following the auctioning process will have a positive effect in the second half-year at the earliest. The announced need for special charges of some CHF 40 million can be maintained, with CHF 30 million being allocated to 2005 and CHF 10 million to 2006.

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, ISIN CH0003541510, Bloomberg FORN SW, Reuters FORN.S).

This E. Schneider
Delegate of the Board and CEO
Tel: + 41 44 868 25 49
Fax: + 41 44 868 35 49