Exchange rates and economic headwind put pressure on Gamma Holding's results

• Turnover: EUR 375 million (2007: EUR 357 million)
• EBITA: EUR 26.3 million (2007: EUR 28.8 million)
• Net group result: EUR 15.6 million (2007: EUR 17.7 million)
• Downward pressure from exchange rates and economic headwind
• Intended sale of Verseidag Ballistic Protection and Sailcloth
• Acquisition of modular belts producer uni-chains (Belting)
• Overcapacity in woven products in Europe for Sleep Care Fabrics
• Solid progress in brand differentiation strategy at Exotic Fabrics

Gamma Holding wants to increase focus and scale in its portfolio of companies and in this regard has the intention to divest both Verseidag Ballistic Protection, part of the Coating & Composites business unit, and the Sailcloth business unit. From this half-year press release onwards, the presentation of these activities has been adjusted in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. Results for continuing operations have also been adjusted accordingly.

In the first six months of 2008 Gamma Holding's turnover excluding discontinued operations rose to EUR 375 million (2007: EUR 357 million). This includes a 6% positive effect arising from the acquisition of the Danish company uni-chains. Currency movements had an effect of -5%. Organic growth of turnover was 4%.

EBITA came to EUR 26.3 million (2007: EUR 28.8 million). This includes a limited positive effect arising from the uni-chains acquisition. Currency movements had an effect of -12%. Organic growth of EBITA was 3%. EBITA as a percentage of turnover amounted to 7.0% (2007: 8.1%).

The net group result came to EUR 15.6 million (2007: EUR 17.7 million), due to a lower operating result, higher financing costs and an improved result from discontinued operations. Adjusted to take account of currency effects, the net group result increased by 1%.

Industrial Solutions

Turnover of the Industrial Solutions sector rose to EUR 231 million (2007: EUR 217 million), including a 10% positive effect due to acquisitions and a -6% effect due to currency movements. Organic growth of the sector's turnover was 2%.

EBITA amounted to EUR 14.5 million (2007: EUR 17.5 million), including a 1% positive effect due to acquisitions and a -20% efffect due to currency movements. Organic growth of EBITA was 2%. EBITA as a percentage of turnover came to 6.3% (2007: 8.1%).

Belting had to contend with the globally weak economic climate and the low exchange rate of the dollar. Large projects for OEMs were delayed, particularly in the United States and Germany. Nevertheless, turnover rose by 1% on a comparable basis, primarily due to growth in Europe and Asia. Additionally, turnover increased as a result of the acquisition of the Danish company
uni-chains, which specialises in modular belts for industries such as automotive, food and paper processing. Due to the continued decline of the dollar exchange rate, part of the Danish production will be relocated to the United States, where uni-chains already has production facilities. Belting developed ultrasync belts, specialty belts designed for industrial applications that demand an accurate drive and synchronised transport. These belts are used in the food industry, in packaging lines and in wood processing.

As a result of the declining economy in the United States and the low dollar exchange rate, Filtration's turnover was under pressure. In the United States the business unit mainly had to contend with disappointing developments in the construction sector. Nevertheless, turnover rose by 4% on a comparable basis, partly because of growth in the Asia Pacific region, where the business unit primarily delivered filter products for the mining industry. In April Filtration acquired Crosible Filtration Ltd., a distributor of filter products in Canada, strengthening the business unit's position in that region. All Canadian filtration activities will be concentrated in this company.

Even though turnover rose by 2% on a comparable basis, Coating & Composites was also adversely affected by currency movements. In the duraskin^® product group (tents and roofing materials) the business unit supplied coated fabric for the roof of the Johannesburg stadium in South Africa. This country will host the 2010 world football championships. Results of the seemee^® product group (printable media fabric) improved, partly due to the supply of coated fabric for all the FIFA banners used during the European football championships in Switzerland and Austria. The performance of the ptfe-solutions product group (PTFE-coated glass fibres for industrial applications) was at the same level as last year.

Lifestyle Fabrics

Turnover of the Lifestyle Fabrics sector rose to EUR 144 million (2007: EUR 140 million). Currency movements had an effect of -5%. Organic growth of the sector's turnover was 8%.

EBITA rose to EUR 11.8 million (2007: EUR 11.3 million). Increased price pressure and lower volumes at Sleep Care Fabrics were offset by an upward trend at Exotic Fabrics. Organic growth of EBITA was 5%. EBITA as a percentage of turnover amounted to 8.2% (2007: 8.0%).

Turnover at Sleep Care Fabrics decreased by 7% on a comparable basis. As a result of the stagnating housing market, the business unit was confronted with lower volumes in both the United States and Europe and faced adverse currency movements. Additionally, Sleep Care Fabrics had to contend with rapidly declining demand for woven mattress fabrics and increasing demand for knitted products, resulting in overcapacity in Europe in the area of woven products. The business unit has also been faced with downward price pressure and lower volumes for some time, which calls for further measures within Sleep Care Fabrics in Europe. At this moment, no concrete announcements can be made with respect to personnel. In China and Australia the business unit performed well. In the area of innovation, the business unit was able to introduce yet another new product: BugShield^®, an innovative, washable, environmentally-friendly mattress fabric that repels bedbugs.

Organic growth of turnover at Exotic Fabrics was 27% compared to the first half of 2007, partly due to upward economic trends in West Africa. The business unit is successfully implementing its brand differentiation strategy. The Vlisco top brand performed well, partly due to the fabrics collection 'Rythme de Jeunesse' launched in June and the new flagship stores that opened in Benin and Togo. Later this year comparable Vlisco stores will be set up in Ghana and Côte d'Ivoire. Uniwax was able to take advantage of larger export volumes. Turnover of GTP also rose, partly as a result of the introduction of a new base colour for the cheaper GTP Nustyle. Growth was also posted by Woodin. This brand has new stores planned in Mali, Burkina Faso and Senegal. The first collection will be presented in the third quarter, combining the well-known African Woodin designs with contemporary fashion trends.

Discontinued operations

Turnover of discontinued operations rose to EUR 40 million (2007: EUR 37 million).

Turnover of Verseidag Ballistic Protection rose during the first six months, due for instance to the supply of bullet-proof vests in France and Italy as well as the armouring for army vehicles.

Turnover of Sailcloth showed organic growth. In order to meet the increasing demand for competitively priced membranes and high-quality fabrics, the business unit developed new products in the first half-year that will be marketed before the year is out. In addition, preparations for the production of high-quality sails have been made in Sri Lanka.

Financial data

The balance of financial income and expense increased to EUR 7.1 million (2007: EUR 5.5 million) due to a higher balance of interest-bearing liabilities. The balance of interest-bearing liabilities at the end of the period increased to EUR 306.2 million (2007: EUR 227.7 million) mainly as a result of the acquisition of uni-chains. In the first half-year, a currency effect of EUR -4.3 million is included as a result of the decline of the US dollar exchange rate.

The result of associates amounted to nil (2007: nil).

The effective tax rate increased to 30.3% (2007: 29.0%), primarily due to an increase in the weighted average nominal tax rate.

The net group result came to EUR 15.6 million (2007: EUR 17.7 million). Earnings per share amounted to EUR 2.05 (2007: EUR 2.36).

In the first half of 2008, investments in property, plant and equipment amounted to EUR 11.0 million (2007: EUR 16.8 million) and were primarily related to Industrial Solutions. Investments fell below the level of depreciation of EUR 16.5 million (2007: EUR 14.8 million).

Trade working capital as a percentage of turnover came to 30.5% (2007: 29.9%). This rise was also caused by a slight increase in inventories as a result of delivery obligations.

Outlook

In view of the current currency pressure and the weak, uncertain economic situation in many markets, Gamma Holding expects the net group result for the year 2008 to be approximately 15% lower than last year, barring any unforeseen circumstances.

Any positive effects from the sale of discontinued operations or additional restructuring costs for Sleep Care Fabrics have not yet been taken into account.

Gamma Holding will continue to pursue its 'Towards leadership 2010' strategy unabatedly, with a focus on the execution of the operational plans, a further integration of recent acquisitions, and measures to improve Sleep Care Fabrics' profitability.

Executive Board Gamma Holding N.V.

Helmond, The Netherlands, 1 August 2008

The overviews, figures and explanatory notes in this half-year report have been drawn up based on International Financial Reporting Standards (IFRS). For the accounting principles, please refer to the explanatory notes included in the Financial Statements 2007. Application of these principles was unamended.

Gamma Holding has opted for the possibility not to draw up this half-year report based on IAS 34, Interim financial reporting.

The figures in this half-year report have not been audited.