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Media release half-year report 2006

Turnaround confirmed – Pleasing growth – Back in the profit-zone.

Forbo increased its sales in the first half of 2006 by 12.5% to CHF 933.1 million. The operating profit (EBIT) improved by 81% to CHF 55.1 million (previous year before special charges: CHF 30.5 million). The net profit of CHF 26.8 million represents a return to positive results.

Baar, August 22, 2006

Net sales in the first half of 2006 increased by 12.5%. The acquisition of the adhesives company Victa in Guangzhou/China contributed 1.7 percentage points to this increase after currency adjustments. Robust economic development in the USA, the continued high level of dynamism in the Asian markets and an improved economic situation in Europe strongly supported the growth in all three businesses.
The determined implementation of strategies, measures to increase efficiency and the falling away of special charges significantly strengthened the profitability of Forbo Group.

The operating profit (EBIT) was raised by 81% to CHF 55.1 million (previous year before special charges: CHF 30.5 million). With an EBIT margin of 5.9%, the profitability of the Group has clearly improved by 2.2 percentage points.

All three businesses contributed to this improvement.

The consolidated net profit rose to CHF 26.8 million (previous year: CHF -6.1 million).

Development of businesses
The flooring business achieved sales of CHF 393.8 million (previous year: CHF 370.8 million). This represents a growth of 6.2%. The operating profit increased significantly in comparison with the previous year, by 54% to CHF 30.8 million (previous year before special charges: CHF 20.0 million).

The adhesives business increased its sales by 21.4% to CHF 367.5 million (previous year: CHF 302.7 million). Victa (Guangzhou) Chemicals Co. Ltd., China, acquired in the reporting period, contributed CHF 15.2 million to this rise in sales. The operating profit increased in comparison with the previous year by 35% to CHF 25.8 million (previous year: CHF 19.1 million).

In the belting business, sales in the first half of the year amounted to CHF 171.8 million, an increase of 10.2% (previous year: CHF 155.9 million). Compared to the same period of the previous year, the operating profit rose by 35% to CHF 4.6 million (previous year: CHF 3.4 million).

Further detailed information on the Forbo Group and its businesses is shown in the 2006 half-year report.

Outlook
If the economic framework conditions remain as positive as they are at the moment, Forbo expects a consolidated net profit for the full year of approximately CHF 50 million.

Forbo is a leading manufacturer of floor coverings, adhesives and beltings. The Group employs some 5 900 people and has an international network of 32 companies with production and sales facilities as well as 46 pure sales organizations in a total of 32 countries. The company’s head office is domiciled in Baar near Zug/Switzerland. In 2005 the Group achieved sales of CHF 1 702.0 million.

Forbo Holding AG is listed on the SWX Swiss Exchange (security number 354151, ISIN CH0003541510, Bloomberg FORN SW, Reuters FORN.S).

Contact persons:

This E. Schneider
Delegate of the Board of Directors and CEO

Jörg Riboni
Chief Financial Officer

Telephone: +41 58 787 25 49
Fax: +41 58 787 20 49