29.10.2007

Weakening demand in third quarter 2007

    Gränichen, Switzerland, October 29, 2007 – Zehnder Group, with international operations in the indoor climate sector, reported lower sales than expected in the third quarter of the year. The main reason for this is weaker demand for radiators, which account for just under 85 percent of the Group's total sales. Given this declining demand, management considers it necessary to lower the forecast figures.

    Contrary to expectations, the demand for radiators declined in the third quarter in the Group's main markets – France, Germany and Italy. Apart from a few exceptions, other West European markets and also China show a similar development. Conversely, the positive trend in sales of comfort ventilation systems and ventilation equipment continued in the third quarter. Above-average growth continued, particularly in Germany and in Switzerland.

    Management does not believe that there will be a reversal of the down trend in the demand for radiators in the fourth quarter of 2007 and hence – not including acquisitions – it expects sales of these products to be below the record result in 2006. It should be borne in mind that the noticeably mild winter impacted very positively on radiator sales last year.

    Based on results so far and the most recent extrapolations, management now expects consolidated sales growth of 3-4 percent (earlier estimate: 6-8 percent) and net profit of up to 15 percent below 2006 (earlier estimate: 6-8 percent up on 2006).

    René Grieder
    Moortalstrasse 1
    5722 Gränichen
    Switzerland

    Chief Financial Officer

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