Zehnder Group: accelerated growth in second half of year

    Gränichen, Switzerland, January 27, 2006. – Zehnder Group, with international operations in the indoor climate sector (radiators and comfort ventilation), reached total sales of EUR 383 million(1) in 2005 (EUR 374.6 million in 2004), an increase of 2 percent.

    After growth of one percent for the first six months of 2005, it rose to just under 4 percent in the second half of the year – particularly because of good sales in the last three months. Both radiators and comfort ventilation benefited from this upswing in demand.

    This sales development is attributable to organic growth, and for comfort ventilation systems it was well above average.

    Business development varied in geographic terms. Above average growth rates were achieved in the Benelux region, in the East European markets, Austria, the U.K., and Italy. Sales in France, Germany, China and the United States were slightly below the prior year's level.

    Steep increases in procurement costs for raw materials and packaging as well as for energy and transport impacted negatively on earnings development in the reporting year. Given the fierce price and volume competition, the additional costs could not be fully passed on to the customers.

    Consequently, group management does not expect the record result of the prior year (net income in 2004: EUR 30.5 million(2)) to be repeated. However, the decrease in net income is expected to be lower than previously anticipated, even though a decline of between 15 and 20 percent had been forecast at the end of the first half of the reporting year.

    As part of its ordinary succession planning and to ensure long-term strengthening of group management, the board of directors appointed three new members of the group executive committee as of January 1, 2006:

    Paul Jansen (born 1949, Dutch citizen), formerly head of J.E. StorkAir in Holland, will take over from Peter Wiesendanger as head of the comfort ventilation business segment. Until his retirement, Peter Wiesendanger will continue to be responsible for the Group's overseas activities (China and the United States).

    Felix Landert (born 1967, Swiss citizen), will take over responsibility for the production companies in the radiator business segment from Jürg Schneider. Jürg Schneider will remain a member of the executive committee and, until his retirement, he will be in charge of the Group's strategically important organizational projects.

    Cyril Peysson (born 1965, French citizen), formerly head of Zehnder S.A.S., the Group's French sales company, will take over from Hans-Peter Zehnder as head of the North and East European sales areas of the radiator business segment. The West and South European sales areas will remain the responsibility of Hans-Peter Zehnder.

    (1) provisional

    (2) incl. third-party interest

    René Grieder
    Moortalstrasse 1
    5722 Gränichen

    Chief Financial Officer

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