Lower net result Gamma Holding in line with forecast

As previously forecast, the net profit of Gamma Holding NV fell by 20.4% to EUR 18.5 million in the first half of 2001. Earnings per share decreased by 22% to EUR 2.46. Compared with the first half of 2000, the operating result fell by 21.7% to EUR 39.5 million. Currency movements had a positive effect of 3% on the operating result. Turnover fell by 0.7% to EUR 472.5 million. Currency movements had a positive effect of 1% on turnover.

Mainly due to the general economic trends, both turnover and operating result were under pressure in the Process and Conveyor Belts, Automotive and Industrial Applications segments. The implementation of the measures taken by the Board of Managing Directors at the beginning of this year to improve results by controlling costs is being accelerated.

The Process and Conveyor Belts segment was affected by the weak economic climate, particularly in the United States. As an important supplier to the food sector, this segment was also affected by the foot-and-mouth crisis in the United Kingdom and the Netherlands.

The Specialties segment (filter technology, coatings, sail cloth and industrial woven and knitted fabrics) was able to maintain the positive trend of the last few years. With their high-tech products, the companies Techfab/IFC, Indutex and Dimension Polyant in particular succeeded in posting higher turnover and results.

Developments in the Automotive segment were disappointing. As a result of substantial price pressure, a much lower result was achieved on a virtually unchanged turnover. Furthermore, the introduction of a new generation of machinery led to a temporary increase in the level of costs, due to start up troubles in the first half of the year.

After many years of growth the Industrial Applications segment was confronted with a downturn in market demand combined with continued price pressure. Within this segment, measures have been taken to bring the cost structure into line with the current market conditions.

The result of Exotic Fabrics remained slightly below last year. A lower result in the Ivory Coast was virtually offset by good results in other West African countries.

The divestment programme for the interior-decoration products companies has now almost been completed.

The deficit on the balance of financial income and expense decreased in the first half of 2001 to EUR 9.2 million (2000: EUR 12.9 million). The disappearance of the negative operating result of the deconsolidated Interior-Decoration Products sector had a positive effect of EUR 4.0 million on this balance.

The effective tax rate rose by 1.6% to 39.0%. This increase was mainly due to the fact that there were less offsettable losses.

The cash flow totalled EUR 40.6 million (2000: 44.2 million).

Investments in tangible fixed assets amounted to EUR 23.7 million, 8% higher than depreciation.

The number of employees increased by 164 to 8,957, mainly due to expansion of production in Africa.

Outlook

Assuming that the general economic situation does not deteriorate further, the net profit for the whole of the year 2001 is expected to be 20-25% down on the year 2000 (before extraordinary expense).

The result expected for 2001 represents a sharp improvement compared with the net result after extraordinary expense for 2000.

Board of Managing Directors, Gamma Holding NV

Helmond, 6 September 2001