Gamma Holding net profit of EUR 30 million in 2001

Gamma Holding N.V., which is active in the sectors Technologies, Industrial Textiles and Exotic Fabrics, wishes to make the following announcement:

2001 was a difficult year for Gamma Holding. Turnover fell by 3 percent to EUR 906 million (2000: EUR 938 million). The net profit from normal business operations totalled EUR 30.4 million, compared to EUR 47.6 million in 2000, a decline of 36 percent. The profit per share from normal business operations fell by 37 percent to EUR 4.03 (2000: EUR 6.38).

For 2001 it will be proposed to pay a cash dividend of EUR 1.60 per ordinary share (2000: EUR 2.54). This is in line with the dividend policy, which aims for a payment of 40 percent of the net profit. The dividend will be payable as of 17 May 2002.

The course of business in 2001

In the context of Gamma Holding's strategy to transform the company into a technology concern, an important step was taken with the acquisition of the Madison Filter Group. Furthermore, in the Process and Conveyor Belts segment, the integration of Ammeraal and Beltech was completed.

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, sailcloth and industrial woven and knitted fabrics). Net turnover in this sector fell by 2%, from EUR 406 million to EUR 398 million. The operating result decreased by 22 percent, from EUR 40.2 million in 2000 to EUR 31.4 million in 2001.

The Process and Conveyor Belts segment was impacted by the unfavourable economic climate in 2001. In the United States this led to a decline in the operating result. In Europe, on the other hand, the operating result remained at virtually the same level as in 2000. The integration process at Ammeraal Beltech temporarily put pressure on sales.

The Specialties segment was affected - through the companies Ames Europe and, to a limited extent, Techfab/IFC - by lower demand from the automobile industry. The other activities of Techfab/IFC and Dimension Polyant delivered a positive performance. The company Indutex managed to further increase sales and income in all three of its product groups, leading to a sharp rise in turnover and operating result.

Gamma Industrial Textiles comprises activities in the fields of Automotive and Industrial Applications. Net turnover in this sector fell by 8 percent, from EUR 369 million to EUR 339 million. The operating result decreased by 53 percent, from EUR 42.9 million to EUR 20.3 million.

The sector faced increasing price pressure and decreasing volumes in 2001. In addition, the Automotive segment was affected by start-up problems with the introduction of a new generation of machines, which led to a temporary increase in costs. In the year under review a programme of measures was initiated to improve profitability by controlling costs.

Gamma Exotic Fabrics posted a 4 percent increase in turnover, from EUR 163 million in 2000 to EUR 169 million in 2001. The operating result decreased by 14 percent compared with 2000, falling from EUR 21.6 million to EUR 18.5 million.

The sector had to contend with higher energy and maintenance costs and a decline in turnover and operating result in Ghana. Turnover and operating result were positively impacted by the expansion of the African distribution network. As part of this expansion, a new sales office was opened in Burkina Faso in 2001.

Results in 2001

The operating result fell by 33 percent to EUR 70.2 million (2000: EUR 104.7 million). The operating result as a percentage of turnover amounted to 7.8 percent (2000: 11.2 percent).

The deficit on the balance of financial income and expense decreased to EUR 20.5 million in 2001 from EUR 28.6 million in 2000, due in part to the EUR 7.7 million positive effect of the absence of the negative operating result of the deconsolidated Interior-Decoration Products sector.

The effective tax rate rose by 2.1 percent from 36.8 percent to 38.9 percent, mainly due to non-offset losses.

The net result after extraordinary expenses increased from EUR 17.6 million to EUR 30.4 million.

Investments in tangible fixed assets in 2001 totalled EUR 55.4 million, 10 percent lower than in 2000 (EUR 61.4 million). Depreciation amounted to EUR 45.4 million, compared with EUR 41.8 million in 2000. Investments in group companies totalled EUR 28.3 million in 2001, compared with EUR 7.4 million in 2000.

The cash flow - the result from normal business operations after taxation plus depreciation - amounted to EUR 75.9 million, compared with EUR 89.4 million in 2000.

In net terms, interest-bearing liabilities totalled EUR 357.1 million at year-end 2001 (2000: EUR 291.3 million). This increase is mainly attributable to the acquisition of the Madi­son Filter Group.

A loan of EUR 55 million was taken out to finance this takeover. This loan will, in combination with other credit facilities, be refinanced in 2002.

Based on the dividend proposal, group equity after profit appropriation amounted to EUR 185.9 million at year-end 2001 (2000: EUR 168.8 million). Group equity amounted to 24.2 percent of the balance sheet total at year-end 2001 (2000: 22.7 percent). The guarantee capital amounted to 26.9 percent of the balance sheet total at year-end 2001 (2000: 26.6 percent).

Outlook

For the Gamma Technologies sector, the operating result is expected to improve, partly due to the acquisition of the Madison Filter Group at the end of 2001. The integration of Ammeraal Beltech, which was completed in 2001, will also have a positive effect on turnover and operating result.

The cost control programmes initiated in the Gamma Industrial Textiles sector in 2001 will improve the efficiency of the existing activities. On the other hand, there is uncertainty surrounding developments on the Automotive market.

The operating result of the Gamma Exotic Fabrics sector is expected to remain stable.

The level of investments will not exceed depreciation.

The improvement of our strategic portfolio and market positions in recent years, as well as the efficiency measures that have been taken, have laid the foundations for further growth of the company.

In view of the uncertainty surrounding the global economy, it is difficult, at this stage, to make specific forecasts regarding Gamma Holding's results in 2002.

Board of Managing Directors, Gamma Holding N.V.

Helmond, 15 March 2002