Gamma Holding 10% rise in profits excluding extraordinary expense

The Board of Managing Directors of Gamma Holding N.V. (active in the sectors Gamma Technologies, Gamma Industrial Textiles and Gamma Exotic Fabrics) wishes to make the following announcement:

In 2000, Gamma Holding's result from normal business operations after taxation rose by 10.1% to EUR 47.6 million. The profit per share from normal business operations increased by 7.2% to EUR 6.38. The result after taxation was affected by a provision, announced last year, of EUR 30 million after taxation for the definitive termination of the interior-decoration products activities. The final result after taxation totalled EUR 17.6 million, with the profit per share amounting to EUR 2.35.

In comparison with 1999, the operating result rose by 4.7% to EUR 104.7 million. Organic growth of the operating result totalled 1.1%, and currency movements had a positive effect of 2.9%. New consolidations and discontinued activities, combined with the completion of a one-off project in 1999, had, on balance, a positive effect of 0.7% on the operating result (on a comparable basis) for 2000.

Turnover increased by 8.3% to EUR 938.4 million. Organic growth of turnover totalled 6.9%, and currency movements had a positive effect of 3.3%. New consolidations and discontinued activities, in combination with the aforementioned one-off project completed in 1999, had, on balance, a negative effect of 1.9% on turnover (on a comparable basis) in 2000.

For 2000, it will be proposed to pay a cash dividend of ƒ 5.60 (EUR 2.54) per ordinary share (1999:
ƒ 5.20 (EUR 2.36)). The dividend will be payable as of 17 May 2001.

The course of business in 2000
The results of the sectors Gamma Technologies and Gamma Industrial Textiles showed a clearly positive trend in the year under review.
 
The Gamma Exotic Fabrics sector was adversely affected by political circumstances and economic difficulties in the Ivory Coast and the Democratic Republic of Congo and saw its result decrease.

The course of business in the three sectors can be summarised as follows:

Gamma Technologies comprises the activities Process and Conveyor Belts and Specialties (filter technology, coatings, sail cloth and industrial woven and knitted fabrics). In 2000, the sector's turnover increased by 5% to EUR 406 million. At EUR 40.2 million, the operating result was 7% higher than in 1999. The Process and Conveyor Belts segment benefited from favourable market trends, particularly in Europe and Asia. The Specialties segment was able to compensate for the completion of a one-off project by outstanding developments at, in particular, Dimension Polyant, Indutex and Techfab.

Gamma Industrial Textiles comprises activities in the fields of Automotive and Industrial Applications. The net turnover of the sector increased by 14% to EUR 369 million. The operating result rose by 16% to EUR 42.9 million. The Automotive segment benefited from restored margins as a result of quality improvement programmes initiated in 1999. The Industrial Applications segment continued its outstanding performance of recent years, particularly at the factory opened in the United States in 1999.

Gamma Exotic Fabrics had to contend with the ongoing economic and political instability in the Ivory Coast and the Democratic Republic of Congo in particular. Partly as a result of a shift in the product mix, the sector posted a reduced operating result of EUR 21.6 million (1999: EUR 25.5 million) on the back of a 4% increase in turnover to EUR 163 million (1999: EUR 158 million).

Results in 2000
The operating result increased by 4.7% to EUR 104.7 million in 2000. The operating result as a percentage of turnover amounted to 11.2% (1999: 11.5%).

The deficit on the balance of financial income and expense rose to EUR 28.6 million (1999: EUR 28.4 million). The negative result of the deconsolidated interior-decoration products activities, which is included in this deficit, totalled EUR 12.0 million (1999: EUR 18.0 million).

In net terms, interest-bearing liabilities totalled EUR 291.3 million at year-end 2000 (1999: EUR 258.8 million). The effective tax rate in 2000 decreased by 1.1% to 36.8%.

At EUR 61.4 million, investments in tangible fixed assets were 7.8% higher than in 1999 (EUR 57.0 million). Investments in group companies totalled EUR 7.4 million (1999: EUR 117.0 million).

Depreciation in the year under review amounted to EUR 41.8 million (1999: EUR 38.8 million).

The cash flow (result from normal business operations after taxation + depreciation) totalled EUR 89.4 million in 2000 (1999: EUR 82.1 million). Based on the dividend proposal, group equity totalled EUR 168.8 million at the end of the year under review (1999: EUR 178.6 million). The ratio of group equity to the balance sheet total was 22.7% at year-end 2000 (1999: 25.2%). The guarantee capital amounted to 26.6% of the balance sheet total at year-end 2000 (1999: 30.6%).

Outlook

It is expected that the divestment of companies in the already deconsolidated Interior-Decoration Products sector will be completed this year. In view of the provision already taken, the Interior-Decoration Products sector will not have a negative effect on the result for the year.

The level of investment in 2001 will again exceed depreciation because of plans for expansion and increased efficiency.

As a result of further growth there will be a limited increase in the number of employees.

Because of uncertainties surrounding the development of the economy in the rest of this year, no forecast can be made at this stage regarding turnover and result for the year 2001.

Board of Managing Directors, Gamma Holding N.V.

Helmond, 16 March 2001