Gamma Holding Towards Leadership

Helmond, Netherlands, Jan 31, 2008 - (ABN Newswire) - - Net group result grows by 18% to EUR 33.0 million; - Takeover of uni-chains completed - Strategic plan: Towards leadership 2010.

Gamma Holding's turnover came to EUR 779 million in 2007 (2006: EUR 774 million). Adjusted to take account of currency effects (-4%), turnover increased by 5%.

The operating result excluding restructuring expenses increased by 3% to EUR 63.4 million (2006: EUR 61.6 million). Adjusted for currency effects (-9%), the operating result excluding restructuring expenses rose by 12%.

The net group result increased by 18% to EUR 33.0 million (2006: EUR 28.0 million). Adjusted for currency effects (-10%), the net group result showed an increase of 28%.

The takeover of the Danish company uni-chains A/S has now been approved by the competition authorities and was completed this week. Gamma Holding is hereby taking a significant strategic step towards strengthening the position of its subsidiary Ammeraal Beltech (Belting Technology) in the growth market for modular process and conveyor belts.

These provisional figures have not yet been audited. The definitive figures for 2007, together with explanatory notes, will be published on 22 February before the start of stock exchange trading.

Strategy Towards leadership 2010

Four years of intensive work on the portfolio, the strategic cost position, growth and synergy have made Gamma Holding a healthy company. Important portfolio changes have been carried out during the transformation process. Assembly activities have been centralised and, like production, moved to low-wage countries. Considerable product knowledge has been built up. Moreover, the business units are close to their customers thanks to an extensive worldwide network of sales offices. Partly as a result of this, the business units have leading positions in niche markets.

Important issues In a globalising market in which production processes and customers' wishes rapidly change, companies have to focus ever more closely on the customer's needs. At present, the business units have a strong product-oriented tradition. At the same time, increasing competition from low-wage countries makes it necessary to put on the market innovative products that will enable Gamma Holding to distinguish itself from other suppliers. This means that the innovative capability must be enhanced. Furthermore, competition requires business processes to be efficiently organised.

Opportunities Gamma Holding has numerous opportunities to further strengthen the group's market position. Accordingly, the strategy for the coming years is geared towards utilising those opportunities, which involves a stronger focus on the customer's wishes, creating economies of scale in the areas of purchasing, production, research & development and marketing & sales, expanding in emerging markets, optimising business processes and acquiring companies with products or technologies that add value to the group.

Strategy The strategy Towards leadership 2010 is intended to give Gamma Holding leading market positions. In order to achieve or strengthen such positions, the focus will be on three themes: the portfolio, growth and operational excellence. These themes form the common thread linking all the strategic actions to be carried out in the business units.

Portfolio The starting point for the retention of business units within the Gamma Holding portfolio is that they should create value by means of growth, innovation and optimisation of business processes. They should have the prospect of developing into a leading player within their market or being able to further strengthen such a leading position. Gamma Holding has decided, on the basis of market focus, to realign the business units and divide them into two new sectors:

1. The Industrial Solutions sector consisting of Belting, Filtration and Coating & Composites. These business units supply process-critical components to industrial customers who operate in partially overlapping markets. 2. The Lifestyle Fabrics sector comprising Sailcloth, Sleep Care Fabrics and Exotic Fabrics. These business units have in common the fact that they supply consumer-related, life-enriching textile products. Their end markets do not share common characteristics.

As regards the group as a whole, all the business units have a common basis of high-quality textiles and comparable production processes.

Growth The growth strategy is aimed at obtaining or strengthening market leadership. Gamma Holding intends to achieve this not only through organic growth, but also through acquisitions. Product and process innovation is the means of bringing about organic growth. To this end, further investments will be made in research & development and marketing & sales.

For the business units in the Industrial Solutions sector the aim is a top-two position worldwide in their own market. Gamma Holding intends to achieve this on the one hand by means of a sharper customer focus and targeted innovations, and on the other hand through acquisitions aimed at broadening the product portfolio and strengthening positions in emerging markets (build & buy). In that connection the strategy for the Belting business unit is aimed at being a total supplier worldwide of a full range of process and conveyor belts and services. Filtration intends to become a global supplier of a broad range of filter products, while Coating & Composites wants to develop into a more market-driven and solution-oriented organisation.

The growth strategy of the Lifestyle Fabrics sector is aimed above all at strengthening the current top positions. Gamma Holding wants to achieve this through innovation, a more sharply focused brand policy and an improvement in the marketing and sales organisation. In that connection, Exotic Fabrics wants to strengthen its leading position in the top segment of African printed fabrics by making the changeover to a high-quality ethnic fashion company with a strong and distinctive distribution network in Western Africa. Sleep Care Fabrics is the market leader in mattress fabrics, with a focus on volumes. The business unit wants, however, to become the main player in the bedcover market by providing added value through innovations and service. Sailcloth intends to consolidate its market leadership by supplying additional sail products and through selective forward integration.

Operational excellence Growth can only be fully utilised if business processes are flexible and fast and costs are not too high. The focus will therefore be very much on optimising business processes in the value chain. In order to ensure that the business units are as competitive as possible, and for the sake of flexibility and service, it is also important that production and assembly should be efficiently organised. In addition, Gamma Holding wants to make better use of the possibilities for synergy in marketing & sales, purchasing, production and innovation. There are benefits to be gained here through economies of scale.

As regards operational excellence, the Industrial Solutions sector is trying to achieve more economies of scale in assembly and further optimisation of purchasing. At Lifestyle Fabrics the emphasis is on optimisation of the business process, a more flexible cost structure and selective outsourcing.

For Gamma Holding, professional human resource management is the basis for the success of this strategy. Good training facilities, career opportunities and employee benefits should contribute to ensuring that the workforce is the engine of well-functioning business units focused on the customer, innovation and high-quality products and services.

New ambitious objectives Gamma Holding's new strategy is designed to lead - on an annual basis in the period 2008 - 2010 - to: - 3 - 5% organic growth of turnover; - a return on sales (EBITA/net turnover) of 8 - 10%; - a return on capital employed (EBITA/average capital employed) of 15 - 20%; - an increase in earnings per share of 8 - 10%.

Executive Board, Gamma Holding N.V. Helmond, Netherlands, 31 January 2008

Profile Gamma Holding develops, manufactures and sells innovative, high-quality textile-based products throughout the world. The company has some 7,000 employees in 41 countries. Its headquarters are located in Helmond (The Netherlands) and its shares are listed on Euronext Amsterdam.

Gamma Holding comprises two sectors, Industrial Solutions and Lifestyle Fabrics, with activities in the field of belting, filtration, coated fabrics and composites, sailcloth technology, sleep care and exotic fabrics. The company is a leading global player in its selected niche markets.

For more information: www.gammaholding.com



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Gamma Holding NV

http://www.gammaholding.com

ISIN: NL0000355824

Stock Identifier: XAMS.GAMN