Pfleiderer posts significant growth of revenue and operating profit in first half of 2011

Neumarkt (ots) -

- Adjusted EBITDA for first six months improves by 38 percent to
54.1 million euros
- Continuing operations already break even before taxes assuming
implementation of restructuring in first half of 2011
- First-half revenue up by 9.4 percent to 595 million euros
(continuing operations, excluding business in North America)
- European business increasingly profiting from restructuring
actions - better capacity utilization allows price increases and
compensates for higher raw-material costs
- Strong growth in Eastern Europe
- Growth anticipated also for full-year 2011

The Pfleiderer Group (ISIN DE 996764749) profited in the second
quarter of 2011 from the implemented restructuring of its operating
activities and significantly increased both revenue and operating
profit in Europe.

Important preliminary remarks

In the interim report published today on the first half of 2011,
the available-for-sale North American business is presented for the
first time separately as discontinued operations, in line with the
provisions of IFRS; the corresponding prior-year figures have been
adjusted for comparability.

It is also intended that the figures presented in the Half-Year
Report do not yet reflect the effects of the financial restructuring
of the Pfleiderer Group, which calls for a massive debt reduction and
extensive capital actions, as those actions have not yet been
completed.

Group revenue of continuing operations in the second quarter
amounted to 293.0 million euros, which is 6.0 percent higher than the
276.5 million euros achieved in the prior-year quarter. Revenue in
the first half of 2011 amounted to 595.3 million euros, representing
an increase of 9.4 percent compared with the prior-year period (543.9
million euros). Once again, the growth driver was the significant
improvement of business in Eastern Europe.

Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA), in which the extraordinary operational
restructuring costs have been eliminated, increased in the second
quarter by 44.0 percent from 20.0 million euros to 28.8 million
euros. EBITDA including operational restructuring costs increased by
5.5 percent in the second quarter from 19.8 million euros to 20.9
million euros.

First-half EBITDA rose by 38.3 percent from 39.1 million euros to
54.1 million euros. Including restructuring costs, EBITDA improved by
14.8 percent to 44.2 million euros (H1 2010: 38.5 million euros).

Pfleiderer once again posted a loss for the period of 74.9 million
euros for the first half of this year, compared with 18.9 million
euros for the first half of last year. The loss primarily reflects a
financial expense of 65.6 million euros, because the debt reduction
of more than 700 million euros agreed upon this year but not yet
implemented and the resulting lower interest charge are not yet
included in the interim financial statements.

Assuming that the actions for financial restructuring had already
been implemented, the Group's result of continuing operations before
taxes would break even for the first half of the year.

Western Europe profits from capacity adjustments

The Western Europe region posted a decrease in second-quarter
revenue of only 2.0 percent from 202.1 million euros to 198.1 million
euros, despite the closure of three plants in Germany, which was
implemented as planned. The EBIT margin almost doubled, however, from
1.7 percent to 3.3 percent (EBIT in relation to revenue). As a result
of plant closures in Ebersdorf, Gschwend and Nidda, excess production
capacity in Germany was largely eliminated; this was the basis for
the significant increase in prices compared with the prior- year
period. Excluding one-time effects, the EBIT margin was actually 6.4
percent.

In terms of its products, Pfleiderer faced a decline in demand for
raw panels with the exception of home-improvement stores. Unit sales
of surface-finished panels increased, however, especially in the
furniture industry. The successful implementation of a new sales
strategy focusing on the expansion of the product range in the medium
price segment resulted in volume growth for laminate flooring of
approximately 4 percent in Europe.

Eastern Europe as a growth driver

Second-quarter revenue generated in the Eastern Europe region grew
by 28.6 percent to 99.8 million euros (Q2 2010: 77.6 million euros).
The EBIT margin continued to improve from 4.4 percent to 5.5 percent.
Increases in raw-material costs, in some cases quite substantial,
were more than offset by volume growth and higher prices. Wood prices
for example increased by almost one third.

Eastern Europe was thus the growth region in the second quarter,
accounting for 33.5 percent of the revenue of continuing operations
and further increasing its importance for the Pfleiderer Group.

The North American business, which is available for sale and
presented as discontinued operations, recorded a revenue decrease in
the second quarter of 13.4 percent compared with the prior-year
period from 104.9 million euros to 90.8 million euros. Exchange-rate
effects were mainly responsible for the decrease, reducing revenue by
22.8 million euros. Overall, demand in the North American market was
higher than in 2009 but weaker than in 2010 following the
discontinuation of subsidies in the area of real estate. Another
factor was that the competitive environment became more difficult due
to cheap imports of laminate flooring from Asia, although Pfleiderer
is deliberately withdrawing from this low-price segment.
Second-quarter EBIT fell from minus 0.2 million euros to minus 1.6
million euros.

Workforce development

The number of persons employed by the Group (including North
America) decreased from 5,579 at June 30, 2010 to 5,177 at June 30,
2011, which is a reduction of 402 persons or 7.2 percent. In Western
Europe, the workforce shrank due to plant closures by 9.2 percent to
2,393. In Eastern Europe, the workforce expanded slightly by 0.6
percent to 1,587. In North America, the number of persons employed
fell by 13.0 percent to 1,094. Compared with the end of 2010 (5,373),
the Group's workforce contracted by 196 persons.

Outlook

The ongoing development of the Pfleiderer Group depends to a large
degree on the implementation of the operational and financial
restructuring concept that has been decided upon. The approvals of
far-reaching capital changes granted by the creditors' meeting in
June and by the extraordinary shareholders' meeting in July were
important milestones in this respect.

Some shareholders and creditors have taken legal action against
those resolutions. At first instance, the Frankfurt District Court
has rejected Pfleiderer's application for release relating to the
resolutions passed at the creditors' meeting. The company will appeal
against that ruling. Following a thorough examination of the
lawsuits, the Executive Board is confident that it will receive the
required court release. Right from the start, Pfleiderer's planning
allowed for the possibility of legal action going through several
instances, so the restructuring remains on schedule.

With regard to business operations, on the basis of the course of
business so far in the second half of 2011, the Executive Board
anticipates the continuation of the upward trend shown in the first
six months of the year. Total revenue of continuing operations in
full-year 2011 should grow by a medium-to-high single-digit
percentage due to the market recovery and despite the plant closures
that have been carried out. The Eastern Europe region will probably
achieve double-digit growth rates, while Western Europe is likely to
remain fairly flat due to the capacity adjustments.

The result of operations for full-year 2011 will depend on whether
and to what extent the financial restructuring is depicted in the
financial statements. Assuming that the financial restructuring is
fully implemented, a net profit is to be expected for the continuing
operations already this year.

In the year 2012, Pfleiderer anticipates further revenue growth
for its continuing operations, unless the current economic situation
worsens substantially, due for example to an exacerbating sovereign-
debt crisis.

About Pfleiderer:

The Pfleiderer AG (ISIN DE 0006764749) is one of the world's
leading producers of engineered wood. The company employs
approximately 5,100 people and operates 17 locations in North
America, Western and Eastern Europe producing engineered wood,
surface finished products and laminate flooring. Pfleiderer is a
preferred partner of the furniture industry, specialist and home
improvement stores, and interior design suppliers. In fiscal year
2010, the Group generated consolidated revenues of approximately E1.5
billion. More information at: www.pfleiderer.com

Contact person:
Media:
Frank Elsner Kommunikation für Unternehmen GmbH
Frank Elsner
Tel.: + 49 (0) 54 04 / 9192-0
Fax: + 49 (0) 54 04 / 9192-29
E-Mail: office@elsner-kommunikation.de

Analysts/Investors:
Lothar Sindel
Vice President Investor Relations
PFLEIDERER AG, Neumarkt
Tel.: + 49 (0) 9181 / 28-8044
Fax: + 49 (0) 9181 / 28-606
E-Mail: lothar.sindel@pfleiderer.com

Please note: The Pfleiderer Group's interim report as of June 30,
2011 can be accessed at
http://www.pfleiderer.com/de/investor-relations