Gamma Holding's first-quarter results

• Turnover: EUR 164 million (2008: EUR 188 million)
• EBITA¹ excluding restructuring expenses: EUR 4.8 million (2008: EUR 14.4 million)
• Net group result: EUR -2.4 million (2008: EUR 9.2 million)
• Programme of cost savings and restructurings is on track

As a consequence of the current economic downturn, market conditions remained exceptionally difficult for Gamma Holding in the first quarter of 2009. For that reason, Gamma Holding has adapted the organisation to these conditions faster than planned. Moreover, the speed at which costs are reduced will be further increased.

Group turnover in the first three months of 2009 was EUR 164 million (2008: EUR 188 million). Currency movements had no effect. Organically, turnover fell by 13%.

Added value fell in the first quarter from EUR 112.5 million in 2008 to EUR 96.4 million in 2009, mainly due to the fall in turnover. On the other hand, Gamma Holding is starting to reap the benefits of the restructurings and stringent cost management. Compared with the first three months of 2008, operating expenses excluding restructuring expenses were EUR 6.5 million lower.

EBITDA² of the group excluding restructuring expenses was EUR 13.0 million (2008: EUR 23.1 million).

EBITA¹ of the group excluding restructuring expenses came to EUR 4.8 million (2008: EUR 14.4 million). Currency movements had an effect of 5%. Organically, EBITA¹ excluding restructuring expenses showed a decrease of 72%.

Restructuring expenses in the first quarter totalled EUR 2.1 million (2008: nil). EBITA¹ was EUR 2.7 million (2008: EUR 14.4 million).

The net group result came to EUR -2.4 million, due to the lower EBITA¹ and higher financing charges.

Industrial Solutions

Industrial Solutions posted a decline in turnover in the first three months of 2009. The fall in demand that the sector had to contend with in the fourth quarter of 2008 as a consequence of the recession continued in the early part of 2009.

Turnover of Industrial Solutions came to EUR 94 million (2008: EUR 116 million). Currency movements had an effect of 1%. Organically, the sector's turnover fell by 20%.

The sector's EBITA¹ excluding restructuring expenses was EUR -0.8 million (2008: EUR 7.3 million). Currency movements had an effect of EUR 0.8 million.

Turnover of Belting came to EUR 57 million (2008: EUR 69 million). As a consequence of the stagnating economy there were delays worldwide in major projects of Original Equipment Manufacturers (OEMs), and customers postponed their orders. That applied to all types of belting, particularly in the construction sector and the automobile industry. The replacement market was also affected by the recession.

Turnover of Filtration was EUR 24 million (2008: EUR 28 million). The worldwide fall in demand for filter products manifested itself above all in the mining, chemical and automobile industries. It was particularly noticeable that OEMs operating in various sectors of industry deferred their spending. On the other hand, demand in the food industry proved less sensitive to the economic cycle.

Turnover of Coating & Composites came under the most pressure in the sector and totalled EUR 13 million (2008: EUR 19 million). Since the fourth quarter of 2008 there has been a sharp drop in demand as a consequence of the worsening economic climate. In particular, seemee^® (printable media fabrics) saw a fall in demand because many companies worldwide have been cutting back on their advertising budgets.

Lifestyle Fabrics

Turnover of Lifestyle Fabrics totalled EUR 70 million (2008: EUR 72 million). Currency movements had an effect of -2%. Organically, the sector's turnover remained the same.

EBITA¹ excluding restructuring expenses came to EUR 5.6 million (2008: EUR 7.1 million). Currency movements had no effect.

Turnover in the Exotic Fabrics business unit showed an upward trend, increasing by 17% from EUR 35 million in 2008 to EUR 40 million in 2009 as a consequence of a pick-up in demand, notably for the products of Vlisco, GTP and Uniwax.

Turnover of Sleep Care Fabrics was EUR 30 million (2008: EUR 37 million). Manufacturers of mattresses cut production in response to the deteriorating economic climate and further reduced inventory.

Discontinued Operations

Turnover of Discontinued Operations was EUR 20 million (2008: EUR 20 million). As already indicated, the process for the sale of Verseidag Ballistic Protection has now been resumed.

Cost savings and restructurings

The group is working hard on the programme of further cost savings and restructurings announced on 20 February 2009, which will involve the loss of approximately 10% of the jobs (about 800 employees) within the group, of which 275 jobs were already shed in the fourth quarter of 2008. Cost savings of EUR 30 million will be achieved in 2009. The programme should ultimately yield annual savings of about EUR 45 million from 2010.

As a consequence of the measures taken, 205 employees in Industrial Solutions and 149 employees in Lifestyle Fabrics left the Company in the first quarter of 2009. Furthermore, short-time working is being introduced in various group companies.

As part of a stringent financial policy, investments have been reduced to a minimum and the Company is being managed very much in terms of working capital.

Debt reduction and financing

On 18 February 2009, Gamma Holding reached agreement on revised financing until March 2010, as a result of which the total facilities made available by the syndicate of banks amount to EUR 390 million. At the end of March, Gamma Holding was in compliance with the newly agreed bank covenants.

In order to reduce the Company's debt, the Company has been looking into the possibilities of disposing of business units at reasonable prices. Under present market conditions, however, this is very difficult because of low valuations and the limited availability of finance for acquisitions.

Against this background Gamma Holding will focus in the coming period primarily on the further implementation of the previously announced programme of cost savings and restructurings.

Moreover, in the recent period there have been concrete talks with an interested party on the possibility of a public-to-private transaction. However, at the beginning of this week it transpired that the potential purchaser was unable to reach agreement with the existing syndicate of banks on the financing of this transaction. Gamma Holding remains open to a public-to-private transaction.

Other events

At the request of the Supervisory Board, Mr Michel Frequin stepped down as a member of the Executive Board. The Company will be headed by Mr Meint Veninga, CEO. The Supervisory Board intends after the shareholders' meeting of 23 April 2009 to appoint the present Group Controller, Mr Leendert van Reeuwijk, as CFO and member of the Executive Board.

In connection with the changed circumstances in the capital market and as the Stichting Preferente Aandelen Gamma Holding (‛the Foundation') does not have financing facilities at present, Gamma Holding and the Foundation have decided to terminate the existing put option, under which the Company was able to require the Foundation to take (4%) participating preference shares in the capital of the Company. Gamma Holding has also concluded an agreement to grant the Foundation the right of enquiry. The Foundation's right to require the Company to issue (4%) participating preference shares (call option) remains unchanged.

Outlook

In view of the current economic downturn and the continuing pressure on the financial markets, market conditions will remain exceptionally difficult in 2009. With the implementation of the programme of further cost savings, restructurings and divestments, Gamma Holding expects to be able to withstand the current recession.

Executive Board of Gamma Holding N.V.

Helmond, 22 April 2009

The figures contained in this trading update have not been audited.

¹  Group result before income tax, interest and amortisation/impairment of goodwill and
    acquired intangible assets

²  Group result before income tax, interest, depreciation, amortisation and impairment of
    property, plant and equipment and intangible assets