Q02. The European Energy- Saving Company. Steep rise in revenue and earnings in first half of /2008 Quarterly Report. Highlight 1.

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1 02/2008 Quarterly Report The European Energy- Saving Company. Highlight 1 Steep rise in revenue and earnings in first half of 2008 Highlight 2 Sharp growth in second quarter confirms forecast for 2008

2 Highlights Highlights: high revenue growth, disproportionate earnings growth Consolidated results for first half of 2008 Market developments Revenue for the CENTROTEC Group reached EUR million in the first half of 2008 and was therefore up 17 % on the prior-year period (EUR million). Revenue outside the core markets Germany and the Netherlands brought in 38 % of the total for the group. The operating earnings were EBITDA of EUR 17.6 million and EBIT of EUR 9.9 million. Five-fold rise in earnings before taxes (EBT) to EUR 7.6 million (previous year EUR 1.5 million). More than five-fold increase in earnings after tax to EUR 5.5 million. Earnings per share (EPS) of EUR 0.33 for the first half (incl. EUR 0.06 non-recurring effect from dilution in connection with the capita increase at CENTROSOLAR) and therefore over five times the prior-year level (EUR 0.06). The equity investment CENTROSOLAR reports revenue growth of almost 70 % and a disproportionately very sharp rise in earnings. The German market for heating technology has regained stability and enjoyed clear growth in the Renewable Energies area. Very satisfying sales growth for solar thermal systems. Government initiatives in more and more countries require and promote the use of innovative, efficient heating and energy systems. The rising prices of oil and gas will increasingly prompt a switch to modern heating systems featuring renewable energies. The trend towards condensing boiler technology continues unabated in all Western and Southern European markets Earnings reflect the continuing high level of material purchase prices. Pioneering joint venture with Qimonda to supply the equity investment CENTROSOLAR with solar cells extends its depth of value added. Outlook: revenue and earnings forecasts for 2008 are confirmed The consolidated revenue target of EUR 435 to 445 million for the 2008 financial year appears to be readily possible on the basis of developments in the first half. The forecast operating result (EBITDA of EUR 47 to 49 million, EBIT of EUR 32 to 34 million) is confirmed after a good first half that is traditionally weaker due to seasonal factors. The anticipated earnings per share of EUR (excluding non-recurring effect from capital increase at CENTROSOLAR) is regarded as readily attainable, among other reasons thanks to the positive development in the investment result. If business progress continues at this rate, the actual figures for 2008 can be expected to be towards the upper end of the forecast range. Business outside the core markets of Germany and the Netherlands will continue to contribute a growing proportion of revenue and earnings across all segments. The recovery in the German market for heating technology is expected to continue as the year progresses, despite a weakening of the economy as a whole and the market for new buildings. The expansion of the Medical Technology area will continue. Strategically and operationally very good progress of equity investment CENTROSOLAR set to continue. 2

3 CENTROTEC Quarterly Report 02/2008 KEY FIGURES GROUP in thousand EUR Changes Total revenue ,4% Gas Flue Systems ,3% Climate Systems ,4% Medical Technology & Engineering Plastics ,8% Earnings EBITDA ,6% EBIT ,7% EBIT Yield (in %) 4,6% 3,2% EBT ,4% EAT ,0% EPS (in EUR; basic) 0,33 0,06 450,0% Balance Structure*** Balance sheet total ,5% Shareholders' equity ,1% Equity ratio (in %) 31,5% 30,1% Property, plant and equipment ,1% Intangible Assets ,0% Goodwill ,6% Net financial liabilities ,7% Net Working Capital ,5% Cash Flow Statement Cash flow I (EAT & depreciation/amortisation) ,3% Cash flow from operating activities (1.408) ,2% Cash flow from investing activities (7.351) (9.191) -20,0% Employees Total (in FTE) ,1% Shares* Number of shares**/*** ,4% Share price ,66 12,32 Year-high 16,14 18,36 Year-low 9,80 12,32 Share price ,66 17,55 * Quotation in EUR and number of shares previous year converted with factor 2 due to the issue of bonus shares ** Weighted average shares outstanding (basic; in thousand) *** Previous period is related to December,

4 Interim Consolidated Financial Statements 1. Consolidated entities and segment structure The structure and extent of consolidation of the CENTROTEC Group hereinafter also referred to as CENTROTEC have not changed compared with the annual financial statements at December 31, Compared with the equivalent figures for the first half of 2007, the group has been extended marginally through the acquisition in September 2007 of bricon ag, which was integrated into the "Medical Technology & Engineering Plastics" division. The segment structure was unchanged compared with the end of the 2007 financial year and comprises the segments "Gas Flue Systems", "Climate Systems" and "Medical Technology & Engineering Plastics". 2. Development in revenue and earnings The CENTROTEC posted revenue of EUR million in the first half of 2008 and therefore an organic rise in revenue of 17.4 % compared with the corresponding prior-year period. Revenue growth has therefore picked up in the course of the year, reaching 23.7 % in the second quarter. However, this very strong development was also exaggerated by a relatively weak prior-year quarter and its extrapolation over the full year is therefore only possible to a limited degree. Revenue (in EUR million) Q Q Year-onyear change 1st half of st half of 2007 Year-onyear change Gas Flue Systems % % Climate Systems % % Medical Technology & 17.8 % % Engineering Plastics Total % % All three segments of the group were able to contribute to this welcome development, with growth for both the second quarter and the first half well into double figures. The Gas Flue Systems segment, for example, reported 22 % revenue growth in the first half of 2008 compared with the corresponding prior-year period. The Climate Systems segment boosted its revenue by 15 % and the Medical Technology & Engineering Plastics segment enjoyed an 18 % rise in revenue. Growth for all three segments was higher in the second quarter than in the first. Over the past two years the two core segments of the CENTROTEC Group that have specialised in energy-saving concepts for buildings, Gas Flue Systems and Climate Systems, have consistently achieved substantial revenue growth in those international markets that are vital to the group's development. Revenue for these segments in the states of the former Soviet Union, France and Italy, for example, rose by over 30 % annually and revenue in the remainder of Eastern Europe, Spain and the USA achieved a growth rate well into double figures. In all, the combined revenue for these two segments of the group earned outside the 4

5 Interim Consolidated Financial Statements home markets of Germany and the Netherlands has now reached 37 %. On the earnings side, CENTROTEC posted even higher growth during the first half of the current financial year. In the first six months of 2008, EBITDA rose by 28.6 % to EUR 17.6 million and EBIT by a very impressive 67.7 % to EUR 9.9 million. As well as the healthy development of those sales markets that are of relevance to CENTROTEC, this illustrates e.g. the economies of scale targeted with the acquisition of Wolf. What makes this earnings trend particularly pleasing is that CENTROTEC traditionally enjoys a stronger second half, and that this success has been achieved despite the continuing high price levels of materials. The exchange rate effects that significantly diminished first-quarter earnings have, by contrast, become relatively less significant as the year has progressed. Earnings before tax (EBT) for the first half of 2008 reached EUR 7.6 million, more than five times the figure for the corresponding period of the previous year. The investment result of EUR 1.9 million (previous year EUR -0.1 million) and the earnings after tax (EAT) of EUR 5.5 million (previous year EUR 1.0 million) both contributed towards this development. The basic earnings per share (EPS) amount to EUR This, too, represents more than a five-fold increase on the prior-year figure (EUR 0.06). The investment result of EUR 1.9 million includes a one-off earnings contribution of EUR 1.1 million (EUR 0.06 per share). This results from a non-recurring effect from the capital increase at CENTROSOLAR and the associated dilution of CENTROTEC's interest (please refer to the Notes for a detailed explanation). 3. Development of the segments 3.1 Gas Flue Systems Thanks to the increasingly stable German heating market and the continuing positive development of the international markets that are of relevance to CENTROTEC, revenue for the Gas Flue Systems segment rose to EUR 54.7 million in the first half of 2008 (previous year EUR 44.7 million). This 22 % growth in revenue contrasted with a rise in earnings of EUR 5.7 million (+ 10 %) at EBITDA level and an increase in EBIT to EUR 3.9 million (+ 15 %). As a result, the erosion of earnings in the first quarter of 2008 due to appreciably higher material purchase prices, sales start-up costs and negative exchange rate effects in particular had largely been made good by the mid-way point. Key figures Gas Flue Systems (in EUR '000) 1st half of st half of 2007 Revenue from third parties 54,710 44,728 Revenue from other segments Change in inventories of 566 1,063 finished goods and work in progress Cost of purchased materials (29,529) (23,355) Employee benefit costs (11,002) (9,884) Other income and expense (9,269) (7,677) EBITDA 5,666 5,139 Depreciation and amortisation (1,814) (1,787) EBIT 3,852 3,352 The segment's positive development is reflected particularly clearly by the very good revenue pattern for OEM business. Nevertheless, due to one key account bringing business forward and the highly seasonal nature of heating technology business, it would not be wholly accurate to extrapolate revenue for the segment over the full year. In line with the higher proportion of OEM revenue, the result for the segment reflects the fact that profit margins in OEM business are rather lower than for trade business. 5

6 Interim Consolidated Financial Statements Another growth area in this segment is business for solar mounting systems for the wholesale trade, which is benefiting from rising international demand for solar systems. The fundamentally very positive development in revenue for the segment is underpinned by ongoing programmes to optimise processes and costs. At Doesburg (the Netherlands), Ubbink is currently implementing a programme to optimise production and logistics, achieve shorter, more flexible delivery times, and improve service quality. In response to customer demand, important systems will in future be governed by a Kanban system and involve more flexible processes and phased production lines. As a result of this greater flexibility in production will be a further reduction in working capital. It will remain the principal objective to safeguard the site's profitable growth. The introduction of a new product data management system was launched with the same objective, to optimise the electronic exchanging of product data between the corporate entities and customers, particularly wholesalers. This facilitates exploiting synergy potential in the marketing and sales area, especially in the international arena. Based on this approach, CENTROTEC continues to make inroads into international markets in the Gas Flue Systems segment, too. This strategy is underpinned by the ever growing trend towards energy-efficient condensing boiler systems, above all in Western and Southern Europe. This trend is being promoted by the record highs in oil and gas prices and is giving the underlying issue of energy efficiency ever greater prominence among politicians, in the media and among consumers. CENTROTEC supplies solutions tailored to a wide variety of applications and market needs through its two core segments Gas Flue Systems and Climate Systems, to serve this global market of the future. Against the backdrop of this extremely positive medium and long-term market situation and the revenue growth of 22 % in the first half of 2008, CENTROTEC believes that its organic revenue growth forecast of approx. 14 % for the full year is readily achievable. With material costs remaining high and to some extent still rising, as well as the current exchange rates, there is nevertheless pressure on margins. This means that the rates of increase for revenue will not filter through undiluted into earnings. Bearing this in mind, an EBIT margin in the high single digits appears to be readily feasible for the 2008 financial year. 3.2 Climate Systems Climate Systems, the highest-revenue segment in the CENTROTEC Group, reported 15 % revenue growth compared with the first half of 2007, to a total of EUR million. The operating earnings EBITDA (EUR 9.4 million, + 44 %) and EBIT (EUR 4.6 million, %) yet again grew at an aboveaverage rate. This confirms that the systematic drive to reduce costs and optimise processes in this 6

7 Interim Consolidated Financial Statements area is taking effect and, in conjunction with synergies and economies of scale from the acquisition of Wolf, is boosting profitable growth for the segment. Key figures Climate Systems (in EUR '000) 1st half of st half of 2007 Revenue from third parties 138, ,146 Revenue from other segments Change in inventories of finished goods and work in progress 1, Cost of purchased materials (70,080) (60,703) Employee benefit costs (41,026) (38,717) Other income and expense (19,497) (15,065) EBITDA 9,438 6,552 Depreciation and amortisation (4,878) (5,226) EBIT 4,560 1,326 The gradual recovery in the German market for heating technology, including in particular the strong demand for renewable energy systems and solar thermal systems in specific was a major factor behind the healthy development in revenue and earnings for the Climate Systems segment. This was especially true of the Wolf Group, which is the largest single company within the group. This positive development contrasts with substantial rises in the purchase prices of materials. The level of new construction activity in Germany moreover remains low and is therefore not providing any kind of stimulus. Nevertheless, the burdens that these circumstances impose primarily on the earnings side are more than balanced out by the continuing positive development in efficient energy-saving systems for renovated buildings and in international markets. In contrast to the previous year, this development is underpinned by a positive trend in both the German and international markets, with double-digit revenue growth. Internationally, the sharp rises in energy prices are prompting growing demand for energyefficient heating, ventilation and air conditioning systems. With its modern, ultra-efficient product range, Wolf is ideally equipped to serve this market. The ongoing development of its product range is strengthening its market position. For example, in the second quarter a higher-performance 29 kw version was added to the COB range of oil condensing boilers, which has been highly commended by the consumer watchdog Stiftung Warentest. By focusing on product development and innovation, the Wolf Group has within just a few years emerged as an independent supplier of technologically advanced products offering excellent value for money. Further evidence of this achievement was furnished by the results of the latest Stiftung Warentest study in Germany, in which Wolf earned the rating "Good (1.6)" for both its oil condensing boilers and solar thermal systems, placing it among the test winners. These achievements are also reflected in the revenue figures for these products, particularly in the area of Renewable Energies, which grew by a much faster rate than the revenue of the group as a whole. Solar thermal systems deserve particular mention, with revenue having virtually doubled compared with the prior-year reference period; market share has consequently also been increased. The performance of the first quarter, in itself already very satisfactory, was thus bettered; this development is continuing beyond the reporting period, accompanied by further escalating energy prices and stabilisation of the German government's policy on subsidies. 7

8 Interim Consolidated Financial Statements The outstanding quality ratings and the significant revenue growth on international markets confirm the strategy of proceeding with international expansion in a clearly focused way, based on high-quality, energy-efficient products "Made in Germany". One emblematic reference project for our development is the "O2 World" in Berlin, one of the largest and most advanced event venues in Europe; the entire air conditioning is handled by 41 large air conditioning units from the Wolf KG-Top range, which operate energy-efficiently thanks to integral heat recovery. Another example is the large-scale "Viertel Zwei" urban development project in Vienna, with Wolf appliances providing energy-efficient climate control for three ultramodern buildings with a total floor area of over 50,000 m². Climate Systems achieved excellent results in a Dutch field study for its ventilation systems with integral heat recovery. Brink Climate Systems has again achieved substantial organic growth over the past six months. Export business in particular enjoyed growth rates well into double digits. The development of international business is being favoured by business deals in many significant growth regions, such as Eastern and Northern Europe, Asia and Oceania, but also in core European countries. On the product side, controlled ventilation plays a vital part in the success of Brink's products, particularly as energy prices continue to rise. The quality of the products and their scope for saving energy by recovering 95 % of the heat in the outgoing air are the key factors behind international business expansion in recently tapped or developing international markets, too. Illustration: "Visuals Viertel Zwei" beyer.co.at The other group companies in the Climate Systems area have likewise been able to demonstrate their expertise and innovative prowess. Ned Air, whose ventilation systems are installed e.g. in luxury yachts and cruise ships, is involved in a Dutch venture sponsored by the EU to build a high-tech sailing ship, for which it is supplying a purposedesigned ultra-efficient ventilation system. Brink On the sales side, we have a good number of sales successes to report over and above the effective partnership with sister companies within the CENTROTEC Group. To generate further growth for Brink, a number of new products were launched in recent months, including the Advance system, a 8

9 Interim Consolidated Financial Statements non-central ventilation unit with heat recovery specifically designed for retrofitting in existing residential buildings. This system means that it is now also possible to realise compact, energyefficient ventilation concepts in renovated buildings, creating fresh revenue potential for Brink in the future. On the basis of the revenue and earnings achieved in the first half of 2008 and the positive market trend both at home and internationally, the segment's revenue forecast for 2008 as a whole of approx. EUR 290 million and an EBIT margin of 6 7 % appear entirely feasible for the Climate Systems segment. 3.3 Medical Technology & Engineering Plastics In the Medical Technology & Engineering Plastics segment, revenue for the first six months of the current financial year was increased by 18 % to EUR 20.3 million. EBITDA rose by 25 % to EUR 2.5 million and EBIT was up 21 % on the first half of 2007, from EUR 1.2 million to EUR 1.5 million. A major factor behind this development was the reduction in the costs already incurred in the first quarter of 2008 for continuing international expansion and for the integration of bricon, coupled with a marked rise in revenue. Key figures for MT & EP (in EUR '000) 1st half of st half of 2007 Revenue from third parties 20,272 17,207 Revenue from other segments Change in inventories of finished goods and work in progress Cost of purchased materials (7,994) (6,752) Employee benefit costs (7,529) (6,481) Other income and expense (3,359) (2,708) EBITDA 2,463 1,966 Depreciation and amortisation (982) (746) EBIT 1,481 1,220 Further progress was made in the first half of 2008 with product development and reengineering, first and foremost in the area of implants, for neurosurgical products and for combinations of active medical devices and sterile consumables. Sales activities were further expanded internationally; by taking part in several exhibitions and international trade congresses, the sales force was able to use the contacts established there to engineer a successful entry into new markets. There were also further successes in the selfmarketing of products. For example, the experience acquired in the manufacturing of blood blending weighers for OEM customers led to the development of the technologically leading Docon blood blending weigher which, after going on sale under Möller Medical's own brand name, very rapidly became the market leader in Germany. Other self-developed products in the areas of blood transfusion, aesthetic medicine and neurosurgery are sold by a rapidly growing network of distributors. The development, design and production capacities needed for this development work both in terms of human resources and facilities are continually being adjusted in response to the growing 9

10 Interim Consolidated Financial Statements requirements. This process may temporarily eat into earnings. In the Engineering Plastics sub-segment, which develops and manufactures semi-finished plastic parts and technical prefabricated parts from highperformance plastics for medical technology and plant engineering applications, the expanded, modernised production capacity is increasingly paying dividends. By expanding our expertise in production and material technology, for instance, we have been able to win new contracts in areas not previously served. Production capacity at Marsberg was yet again increased considerably in the first half of 2008 in order to further stabilise this area's profitable growth. Business performance in the first half of 2008 reflects medimondi AG's value added strategy as endorsed by and implemented with the approval of the CENTROTEC management. Its focus is on organic growth and targeted acquisitions. CENTROTEC is supporting medimondi's management in its continuing efforts to prepare the Medical Technology & Engineering Plastics segment for hiving off as a separate entity under the umbrella of medimondi AG. The medium-term objective is to prepare it for an IPO while never overlooking the operational opportunities of the segment. The full-year target revenue for 2008 of slightly less than EUR 40 million and an EBIT margin of approx. 8 % are confirmed. 4. Development of affiliated companies Following a capital increase by CENTROSOLAR Group AG in May 2008, the interest in the CENTROSOLAR Group equity investment hereinafter referred to as CENTROSOLAR fell to % (33.63 % at March 31, 2008). This nevertheless remains the largest affiliated company of the CENTROTEC Group that is not fully consolidated. In the first half of 2008, CENTROSOLAR achieved revenue of EUR million, almost two-thirds higher than in the first half of 2007 (EUR 91.8 million). Earnings moreover showed a disproportionately high improvement at all levels. For example, EBITDA for the first half of 2008 rose by 92 % to EUR 11.5 million (previous year EUR 6.0 million). EBIT rose several times over to EUR 6.8 million (previous year EUR 1.1 million) despite IFRS 3 depreciation and amortisation from corporate acquisitions remaining high, though this latter factor is set to fall. Earnings after tax amounted to EUR 2.7 million, contrasting with EUR -0.4 million in the corresponding prior-year period. This component of CENTROSOLAR's result is incorporated into CENTROTEC's result as the amount of EUR 1.9 million, in line with the latter's interest in the former. The investment result of EUR 1.9 million includes a one-off profit contribution of around EUR 1.1 million (EUR 0.06 per share). This one-off effect results from the capital increase at CENTROSOLAR and the associated dilution of CENTROTEC's interest. 10

11 Interim Consolidated Financial Statements When considering the interest in CENTROSOLAR, it should be noted that because it is carried as an equity investment, the operating earnings (EBITDA, EBIT) are not reflected in the revenue and earnings figures of the CENTROTEC Group. On the other hand, the current price of CENTROTEC shares does include a component of approx. EUR 2.75 for the investment, with the result that any comparison of the key figures that failed to reflect this would lead to distorted results and interpretations. As previously explained in the report on the first quarter of 2008, production capacity was further increased during the opening months of the current financial year in response to the CENTROSOLAR Group's revenue performance, which outstripped the general rate of market growth. The company's own production capacity for crystalline solar modules at the Wismar and Doesburg plants is to increase five-fold by 2010, compared with the 2007 position. CENTROSOLAR has furthermore secured direct access to approx. 25 % of the crystalline solar cells that it needs for its own module production operations, by establishing a joint-venture plant for the manufacture of crystalline silicon solar cells together with the semiconductor manufacturer and Infineon subsidiary Qimonda AG. the first half of In the R&D area, the main focus of attention is on increasing the efficiency of photovoltaic systems and on optimising the way systems are integrated into a building. By way of tangible evidence of success in this domain, the patented anti-reflective coating for solar glass that was developed by Centrosolar Glas GmbH itself received the Bavarian Award in June There has moreover been a widespread positive response to the very efficient thin-film modules that CENTROSOLAR supplies; thanks to their low weight and ease of handling, they are also suitable for installation on surfaces that hitherto could not be used. From a sales viewpoint the first "Intersolar" to be held in Munich was a huge success. The large number of international visitors coming to CENTROSOLAR's stand, e.g. from African countries and the Middle East, reflected how CENTROSOLAR products are enjoying worldwide demand. A contract was signed in May with a semistate-owned development and housing company based in Dubai, United Arab Emirates, to supply high-grade solar modules and components for an output running into MW. This deal gives CENTROSOLAR an excellent springboard from which to tap into the highly lucrative, fast-growing markets of the Middle East. Alongside the equally fast-growing markets in the Mediterranean region and the USA, three major export regions have now emerged. The export ratio doubled to 62 % in the first half. CENTROSOLAR is stepping up its research and development efforts as it gains access to promising international markets in order to consolidate the very positive revenue and earnings performance of 11

12 Interim Consolidated Financial Statements The balance sheet total rose by EUR 5.3 million to EUR million in the first half of This increase is largely attributable to the seasonal rise in net working capital. Net working capital (current assets cash and cash equivalents current, noninterest-bearing liabilities) was up EUR 12.3 million since the start of the year at EUR 66.7 million. The biggest changes were on the assets side, under inventories (up EUR 3.4 million), receivables (up EUR 6.7 million) and cash and cash equivalents (down EUR 10.2 million), due to the traditional rise in business volume as the year progresses. This development means that CENTROSOLAR continues to make good progress with its chosen strategy of international expansion, and it expects exports to account for well over 50 % of the target revenue for the full year of EUR 310 million. On the basis of the first-half performance, both this revenue target and the forecast rise in EBITDA to EUR 22 million appear to be readily possible. The second equity investment of Bond Laminates GmbH, in which an interest of % is held, finished expanding the production capacity at its Brilon base according to schedule in the first half of 2008 and reported a positive development in revenue and earnings. 5. Net worth, financial position and financial performance There are no structural changes of material significance in the balance sheet of the CENTROTEC Group at June 30, The changes compared with the reporting date of December 31, 2007 and also with the end of the first quarter are predominantly due to seasonal effects. Despite capital expenditure of EUR 7.7 million, financial liabilities were reduced as scheduled during the first half (down EUR 2.0 million), improving the interest result compared with the first half of As a result of the seasonal fall in cash and cash equivalents to EUR 6.9 million (EUR 17.0 million at December 31, 2007) the net financial liabilities rose from EUR million to EUR million. By virtue of its existing cash and cash equivalents and unutilised credit lines, the CENTROTEC group continues to have adequate surplus funds in reserve. The group's equity grew by EUR 6.6 million in the first half of 2008 to EUR million, predominantly as a result of its earnings. The equity ratio at June 30, 2008 consequently reached 31.5 %, compared with 30.1 % at December 31, In the first six months of the current financial year the sum of earnings after tax and depreciation and amortisation, referred to as cash flow I, rose by EUR 3.4 million to EUR 13.1 million; with depreciation and amortisation and falling slightly, this can be attributed exclusively to the earnings performance. 12

13 Interim Consolidated Financial Statements The cash flow from operating activities amounted to EUR -1.4 million in the first half of 2008 (previous year EUR 2.5 million): This development was attributable to the revenue-driven rise in working capital, which was nevertheless offset in part by the substantially improved result. Operating cash flow for the year as a whole is expected to be clearly positive. Development compared with the first quarter reinforces this expectation. Cash flow from investing activities was EUR -7.4 million, compared with EUR -9.2 million for the corresponding prior-year period. This change is largely due to the deconsolidation of the interest in CENTROSOLAR and the resulting outflow of cash and cash equivalents (approx. EUR 2.6 million) in accounting terms. This key figure therefore only provides a limited indication of CENTROTEC's actual investment activity this year. 6. Capital expenditure The total capital expenditure by the CENTROTEC Group amounted to EUR 7.7 million in the first half of 2008 and was therefore 34 % up on the corresponding figure for the previous year of EUR 5.7 million. This increase reflects in particular the investment in plant extensions necessitated by growth, as well as investment in future growth segments. Spending on property, plant and equipment amounted to EUR 6.1 million, compared with EUR 4.4 million in the previous year. A sum of EUR 1.5 million (EUR 1.3 million) was invested in intangible assets. Capital expenditure (in EUR '000) 1st half of st half of 2007 Gas Flue Systems 2,731 1,851 Climate Systems 3,237 2,488 Med. Techn & Eng. Plast. 1,688 1,378 Total 7,656 5,717 Machinery and plant accounted for easily the largest portion of spending on property, plant and equipment, or EUR 4.7 million. The biggest single investment items were at the Mainburg, Marsberg and Doesburg locations. Within intangible assets, the company invested principally in in-house production capitalised and in software licences- 7. Employees At the end of the first half of 2008, the CENTROTEC Group employed 2,706 people. The average over the first six months of 2008 was 2,600 employees. Expressed as full time equivalents (FTE), the figure was 2,507 and therefore an increase of 32 on the average for the prior-year period. Over the first six months the personnel expenses ratio fell from 29.9 % in the first half of 2007 to 27.6 % as a result of increased capacity utilisation. Personnel expenses for the group in absolute terms amounted to EUR 59.6 million for the first six months of 2008 (previous year EUR 55.1 million). 8. Share price developments There was a predominantly sideways shift in the trading price of CENTROTEC shares during the second quarter of 2008, with the shares opening the quarter on EUR in Xetra trading and closing the quarter on EUR The highest trading price 13

14 Interim Consolidated Financial Statements during the quarter, and in fact during the first half of 2008, was reached on April 4, 2008 with an Xetra closing price of EUR The shares' low point during the second quarter was EUR at the start of June. The lowest price during the current financial year was reached on January 21, 2008, when the shares closed on EUR 9.80 in Xetra trading. After the reporting period, the trading price of CENTROTEC shares stabilised at a level well above EUR 14, at slightly elevated trading volumes. course of the year. The consistently good share price performance compared to the relevant indices and also to individual reference stocks reflects how the positive ratings by analysts, inclusion in sustainability standards and, last but not least, the successful business performance are being well received by the financial market. The opinions voiced and the voting results at this year's Shareholders' Meeting likewise reflect the shareholders' confidence in the company's bodies and employees, as well as in CENTROTEC shares. The trading price made positive progress after the reporting period, rising to a level well above EUR 15 (EUR Xetra closing price on August 11, 2008). The resulting rise in market capitalisation to approx. EUR 260 million improves the ranking of CENTROTEC's shares in the list of potential candidates for admission to the SDAX next time the index comes up for review. CENTROTEC share price performance (Xetra) from January to July 2008 Source: There were 16,536,296 no-par value ordinary shares (ISIN DE , WKN ) outstanding (incl. treasury stock) on June 30, The rise in the number of shares by 43,300 units compared with the end of the first quarter of 2008 is due to the exercising of stock options by employees and corporate bodies under the stock option scheme. The market capitalisation of the CENTROTEC Group therefore amounted to approx. EUR 225 million at the balance sheet date of June 30, In relation to the relevant indices (GEX, SDAX, TecDAX) CENTROTEC shares have put in a clearly positive performance over the various reporting periods but have been unable to break free from the general weakness of the stock market over the 9. Opportunities and risks There have been no fundamental changes in the assessment of opportunities and risks in the core areas of business compared with the position outlined in the 2007 Annual Report. However, in view of the exchange rate effects on earnings in the first quarter, particularly in the Gas Flue Systems segment, as well as hedging the financial risk of exchange rate risks in the short term, various structural measures to reduce structural dependence on exchange rate fluctuations were stepped up. These include increased procurement activities in the dollar region and examining possible options for production in the dollar region. The generally expected cooling-down of economic development in Germany and the eurozone could nevertheless result in a weakening of growth in the 14

15 Interim Consolidated Financial Statements further course of business, particularly in respect of sales to the trade. On the other hand, persistently high energy prices will continue to stimulate demand for energy-saving solutions. Through its ongoing strategy of international expansion, the CENTROTEC Group has moreover further reduced its dependence on individual national markets and will thus be able to compensate for fluctuations in revenue in its various sales markets. 10. Expectations The situation in the German heating market is developing positively compared with the previous year's weak level. Most international markets for heating technology continue to experience marked growth and moreover exhibit a continuing trend towards efficient condensing boiler technology and renewable energies. These trends are underpinned by the basic development in energy prices, the climate change debate and the resulting need to use energy efficiently. Increasing regulatory measures at various levels and the financial constraints being faced by private households, industry and the public sector will promote a general awareness of the need for energy efficiency on an increasingly worldwide scale. Nor will this development be undermined by the recent easing of the oil price, which still remains very high. As a general principle, continuing growth in worldwide demand coupled with stagnating or falling oil production rates means that the prices of fossil fuels can be expected to continue to rise in the medium to long term. Thanks to its international positioning and a modern, high-quality product range that focuses on customer requirements the CENTROTEC Group is very well placed to respond to this market demand and thus maintain its profitable growth. By consistently pursuing a policy of market-driven innovation and a long-term strategy of expansion, its aim is to consolidate its existing market position through organic growth and gain access to additional potential markets through acquisitions. It will systematically maintain its emphasis on energysaving solutions in the areas of heating, climate control and ventilation technology, as well as renewable energies and solar thermal technology in specific, and increasingly integrate its products into global solutions. CENTROSOLAR Group AG, the equity investment that is not fully consolidated by CENTROTEC, has a comprehensive range of products and services in the area of photovoltaics that is equally benefiting very considerably from the trend towards greater energy efficiency and renewable energies, and is set to make a growing contribution towards the pretax and post-tax earnings of the CENTROTEC Group. 15

16 Interim Consolidated Financial Statements The figures for the first six months of the financial year and the current level of orders, as well as projects that are in development or already being implemented, confirm the healthy market position of the CENTROTEC Group. This, combined with the typically more profitable course of business in the second half of the year, gives rise to an optimistic outlook for the 2008 financial year as a whole, and indeed beyond. In light of these circumstances, the forecasts for the current financial year of revenue of EUR million, EBIT of EUR million and EPS of EUR (excluding the one-off earnings contribution of EUR 0.06 due to nonrecurring effects of the equity investment) remain wholly valid. If business progress continues at this rate, the actual figures for 2008 can be expected to be towards the upper end of the forecast range. Brilon, August 2008 The Management Board 16

17 CENTROTEC Quarterly Report 02/2008 Consolidated balance sheet at June 30, 2008 in thousand EUR ASSETS Non current assets Current assets Goodwill Intangible assets Property, plant and equipment Financial investments accounted for using the equtiy method Loans and investments Other assets Deferred tax assets Inventories Trade account receivables Income tax receivable Cash and cash equivalents Other assets ASSETS

18 CENTROTEC Quarterly Report 02/2008 Consolidated balance sheet at June 30, 2008 in thousand EUR EQUITY AND LIABILITIES Shareholders` equity Share capital Additional paid-in-capital Treasury stock (112) (112) Retained earnings Profit attributable to share capital holders of the CENTROTEC Sustainable AG Minority interest, present within equity (123) (39) Non current liabilities Pension accruals Other accruals Financial liabilities Other liabilities Deferred tax liabilities Current liabilities Other accruals Income tax payable Financial liabilities Trade accounts payable Other liabilities Equity and Liabilities

19 CENTROTEC Quarterly Report 02/2008 Consolidated income statement from January 1 to June 30, 2008 in thousand EUR Revenues Other income Changes in inventories of finished goods and work in progress Production for own fixed assets capitalized Cost of purchased materials and services ( ) (89.929) Personnel expenses (59.557) (55.082) Other expenses (35.278) (30.033) EBITDA Depreciation and amortisation (7.674) (7.759) Operating income (EBIT) Interest income Interest expenses (4.668) (4.461) Result of investments accounted for using the equity method (118) Result before income taxes (EBT) Income tax (2.114) (538) Net income (EAT) Profit or loss attributable to minority interest (43) (22) Profit attributable to share capital holders of CENTROTEC Sustainable AG EPS (Earnings per share in EUR) Earnings per share (basic) 0,33 0,06 Earnings per share (diluted) 0,33 0,06 Weighted average shares outstanding (in units; basic) Weighted average shares outstanding (in units; diluted)

20 CENTROTEC Quarterly Report 02/2008 Consolidated income statement from April 1 to June in thousand EUR Revenues Other income Changes in inventories of finished goods and work in progress Production for own fixed assets capitalized Cost of purchased materials and services (57.308) (46.959) Personnel expenses (30.432) (27.914) Other expenses (17.927) (14.813) EBITDA Depreciation and amortisation (3.886) (3.905) Operating income (EBIT) Interest income Interest expenses (2.307) (2.328) Result of investments accounted for using the equity method Result before income taxes (EBT) Income tax (1.676) (176) Net income (EAT) Profit or loss attributable to minority interest (17) (43) Profit attributable to share capital holders of CENTROTEC Sustainable AG

21 CENTROTEC Quarterly Report 02/2008 CASH FLOW STATEMENT in thousand EUR Net income before taxes and interest (EBIT) Depreciation Gain/loss on disposal of non-current assets 168 (156) Other non-cash items 623 (969) Increase/decrease in accruals (436) Increase/decrease in inventories, trade receivables and other assets that cannot be allocated to investing or financing activities (13.714) (7.676) Increase/decrease in trade payables and other liabilities that cannot be allocated to investing or financing activities (3.212) Interest paid (3.492) (4.156) Income taxes paid (933) (154) Cash Flow from operating activities (1.408) Acquisition of share in participations - net of cash acquired and outstanding earn outs to be paid (320) (383) Change in cash flow as a result of change full consolidation into At Equity 0 (2.583) Purchase of property, plant and equipment/ intangible assets/ investments/ financial assets/ loans receivable (7.143) (6.538) Proceeds from disposal of property, plant and equipment/ intangible assets/ investments/ financial assets/ loans receivable Cash Flow from investing activities (7.351) (9.191) Proceeds from issuance of shares Proceeds from financial liabilities Repayment of financial liabilities (24.026) (10.640) Cash Flow from financing activities (2.707) (6.275) Change in liquid funds (11.466) (13.005) Liquid funds at the beginning of the financial year (1.249) Liquid funds at the end of the period (9.982) (14.254) 21

22 CENTROTEC Quarterly Report 02/2008 STATEMENT OF MOVEMENTS IN EQUITY from January 1 to June 30, 2008 in thousand EUR Share capital Additional paid-in capital Treasury stock Stock option reserve Deferred tax reserve Currency translation differences in shareholders' equity Fair value adjustment of interest rate derivates Retained earnings and profit carryforward Profit attributable to Minority share capital interest holders of presented CENTROTEC within equity Consolidated equity January 1, (112) (358) (39) Transfer to revenue reserves (16.622) 0 Change from the exercise of options Share option plan Currency translation differences Fair Value adjustment interest rate derivatives (312) Profit attributable to sharholders of CENTROTEC Sustainable AG June 30, (112) (297) (242) (39) Profit or loss attributable to minority interest (43) (43) Changes due to minority acquisitions (40) (40) Currency translation differences (1) (1) June 30, (112) (297) (242) (123) Share capital Additional paid-in capital Treasury stock Stock option reserve Deferred tax reserve Currency translation differences in shareholders' equity Fair value adjustment of interest rate derivates Retained earnings and profit carryforward Profit attributable to Minority share capital interest holders of presented CENTROTEC within equity Consolidated equity January 1, (112) (62) Transfer to revenue reserves (14.316) 0 Changes due to the issue of bonus shares (8.212) 0 Change from the exercise of options Share option plan (85) 254 Fair Value adjustment interest rate derivatives Change in status of CENTROSOLAR GROUP 253 (71) (199) (370) (54.763) (55.150) Profit attributable to sharholders of CENTROTEC Sustainable AG June 30, (112) (261) Profit or loss attributable to minority interest (22) (22) June 30, (112) (261)

23 CENTROTEC Quarterly Report 02/2008 SEGMENT REPORT from January 1 to June 30, 2008 in thousand EUR Segment Structure Gas Flue Systems & Other Climate Systems Medical Technology & Engineering Plastics Consolidation Total Statement of Earnings Revenue from third parties Revenue from other segments (687) (881) 0 0 Chang. in invent. of finished goods and work in progress Cost of purchased materials (29.529) (23.355) (70.080) (60.703) (7.994) (6.752) ( ) (89.929) Employee benefits costs (11.002) (9.884) (41.026) (38.717) (7.529) (6.481) 0 0 (59.557) (55.082) Other income and expenses (9.269) (7.677) (19.497) (15.065) (3.359) (2.708) 0 0 (32.125) (25.450) EBITDA Depreciation and amortisation (1.814) (1.787) (4.878) (5.226) (982) (746) 0 0 (7.674) (7.759) Segment result (EBIT) Interest income Interest Expense (4.668) (4.462) Result of investments accounted for using the equity method (118) (118) EBT Income tax (2.114) (538) Net income (EAT) Profit or loss attributable to minority interest (43) (22) Profit attributable to shareholders CENTROTEC Sustainable AG Balance Sheet Key Figures* Assets Financial investments accounted for using the equtiy method Loans and financial assets available for sale Entitlement to income tax rebates** Liabilities Financial liabilities Income tax payable** Investments Total investments in property, plant, equipment and intangible assets*** * Previous year is related to December, ** Including deferred tax *** Incl. Goodwill and values out of business combinations; year to date; without At Equity result 23

24 Explanatory Notes 1. The CENTROTEC Group The CENTROTEC Group (hereinafter referred to as CENTROTEC) is an international group, the focus of whose activities is on the development, production and sale of energy-saving products for air conditioning systems for building. In addition to its existing business activities, CENTROTEC regards its business purpose as including the establishment and acquisition of new business areas and companies. The group parent, CENTROTEC Sustainable AG with registered office in Brilon, is listed in the Prime Standard in the GEX index under the stock exchange codes CEV, WKN and ISIN DE of the Frankfurt Stock Exchange. It is entered on the Commercial Register of the Local Court of Arnsberg, Germany, under the number HRB The company's head office is located at Am Patbergschen Dorn 9, Brilon, Germany. CENTROTEC Sustainable AG is not part of a superordinate group, and is the ultimate parent company of the group presented in these quarterly accounts. Further financial and corporate information on CENTROTEC is available from the above address, or on the homepage 2. Accounting standards and policies These Interim Consolidated Financial Statements at June 30, 2008 have been prepared in accordance with the "International Financial Reporting Standards" (IFRS) for interim financial reporting issued by the International Accounting Standards Board (IASB), as applicable within the European Union (EU), taking account of Section 315a (1) of German Commercial Code. 24 All IFRS standards, and in particular IAS 34 (Interim Financial Reporting), that were valid at the reporting date and the application of which was mandatory at that date, have been applied. The accounting policies explained in the Consolidated Financial Statements for 2007 have likewise been applied in this First-Half Report, unless otherwise indicated, and apply correspondingly. The First- Half Report should therefore be read in conjunction with the audited Consolidated Financial Statements at December 31, These interim financial statements have not been subjected to any scrutiny by an independent auditor. The first-half reporting date for all companies included in the Consolidated Financial Statements is June 30, The financial statements have been prepared in euros; unless otherwise indicated, the amounts quoted refer to thousand euros (EUR thousand). For mathematical reasons, there may be rounding differences of +/- one unit. The Management Board points out that the forward-looking statements made in the first-half financial statements are based on current expectations, assumptions and estimates. These statements are not to be interpreted as guarantees that the forecasts made will prove correct. Rather, future developments and occurrences are dependent on a wide range of factors that are subject to risks and uncertainties, the influencing factors of which lie outside the sphere of influence of CENTROTEC. Actual developments may therefore depart from any implicit or explicit forward-looking statements made. 3. Corporate and investment structure All direct and indirect subsidiaries of the parent company and group parent are included in the Consolidated Financial Statements of

25 Explanatory Notes CENTROTEC. A total of 43 companies were comprehensively consolidated at June 30, There have been only insignificant changes in consolidation since the annual financial statements at December 31, The business activities of CENTROTEC are classified according to the segments Gas Flue Systems & Other, Climate Systems, and Medical Technology & Engineering Plastics. The classification is unchanged compared with the annual financial statements at December 31, Changes in the investment structure CENTROSOLAR has refinanced its share of the equity capital to be contributed to the joint venture through a capital increase of approximately 9.3 % by way of a private placement. As a result of this transaction, CENTROTEC's interest in CENTROSOLAR fell to just under 30.8 %. Detailed information about the CENTROTEC Group, which is accounted for using the equity method, is to be found in the First-Half Report of CENTROSOLAR Group AG, Munich, at June 30, That report is available at Consolidated companies In June, CENTROTEC acquired a further 24.9 % in the already comprehensively consolidated EnEV- Air GmbH and now holds an interest of 98.9 %. Ned Air companies were established in Poland and France as part of a drive to expand internationally. Investments accounted for using the equity method At the start of May 2008 CENTROSOLAR Group AG, which is accounted for by the equity method, established a joint venture with Qimonda AG, Munich, Germany, for the manufacture of crystalline solar cells. The production plant will be built near Porto, Portugal, directly next to an existing Qimonda semiconductor plant. The joint venture will be investing around EUR 70 million by September Approximately 70 % of the financing will be arranged via banks. In addition, the partners are currently planning to apply to the Portuguese government for a package of EUcompliant subsidies. The equity investment will contribute 49 % of the equity capital required by the joint venture and will consequently receive 49 % of the cells manufactured Notes to the financial statements for the first half Seasonal factors Sales of systems and equipment for the airconditioning of building experience seasonal fluctuation over the course of the year. Sales are influenced by the prevailing weather conditions and the completion cycles of buildings. The normal pattern is that replacement parts and systems experience higher demand during the colder seasons, whereas this business is less pronounced in the second half of the year due to the higher number of new buildings being completed. We therefore post lower revenue in the first half and higher revenue in the second half.

26 Explanatory Notes Seasonal distribution of revenue, EUR million Quarter * I II III IV Total (e) * As If pro forma excluding Solar, including Wolf Recognition and measurement aspects Subsequent adjustments in the purchase price allocation for acquired non-current assets of bricon ag have increased goodwill by EUR 0.1 million. The acquisition of further shares in EnEv Air prompted a further rise in goodwill of around EUR 0.3 million. Forward contracts to hedge foreign currency risks were concluded in the period under review. As they do not satisfy the special requirements for hedge accounting, they are classified as held for trading and are included in the current assets or liabilities. At June 30, 2008 the new values and their volume were considered to be of no material significance for the net worth, financial position and financial performance of CENTROTEC. Changes in the capital stock and the number of shares, issuance of options 43,300 options were exercised during the first half on the basis of the stock options scheme. As a result, the capital stock rose by a further EUR 43,300 or 43,300 shares at the start of the second quarter, to a present EUR 16,536,296, divided into 16,536,296 no-par value ordinary shares. On June 23, 2008, 228,000 options for employees, managing directors and Management Board members were issued at a price of EUR Development in shares total, thousands Total, January 1 16,493 8,204 Addition of shares issued through the exercising of options 43 8 Addition due to the issuance of bonus shares - 8,212 Total, June 30 16,536 16,424 Conditional Capital III By resolution of the Shareholders' Meeting on May 29, 2008 the capital stock is conditionally increased by a further EUR 756,000, divided into 756,000 no par value shares (Conditional Capital III). The Management Board is authorised to issue warrants for subscription to new bearer shares in the company until December 31, 2014, on one or more occasions. Employees, managing directors and Management Board members of the company and of its affiliated companies pursuant to Section 17 of German Stock Corporation Law are entitled to subscribe. New shares are created where the options are exercised. These pay dividends from the beginning of the financial year in which the options are exercised. Treasury stock Pursuant to the resolution of the Shareholders' Meeting of May 24, 2007 the company was authorised until November 23, 2008 to acquire treasury stock which, together with existing treasury stock, represents up to 10 percent of the capital stock at the time of the authorisation taking effect. This authorisation was renewed. Pursuant to the resolution of the Shareholders' Meeting of May 29, 2008, while at the same time cancelling the authorisation to acquire treasury stock granted by the Shareholders' Meeting on May 24, 2007, authorisation was granted until November 27, 2009

27 Explanatory Notes to acquire treasury stock which, together with existing treasury stock, represents up to 10 percent of the capital stock at the time of the authorisation taking effect. The price for the acquisition of these shares may not be more than 10% higher or more than 10% lower than the closing price in Xetra trading on the Frankfurt Stock Exchange (or in an equivalent successor system) for shares of the same class and features on the ten trading days preceding the acquisition. The Management Board is authorised to offer all or some of the shares thus acquired to third parties in (part) payment of the acquisition of companies or investments in companies, excluding the shareholders' right of subscription. The Management Board is furthermore authorised to retire the company's treasury stock without the need for a further resolution to be adopted by the Shareholders' Meeting. The retirement may be restricted to part of the purchased shares. Related party disclosures Within CENTROTEC, goods and services are purchased by a large number of business partners. They are also supplied by or to persons or companies who can be classified as related parties. Transactions with these persons or companies are conducted at arm's length. Transactions with related parties were presented comprehensively in the Consolidated Financial Statements for 2007 as a matter of principle. All reciprocated services such as the use of infrastructure are billed on generally accepted market terms (arm's length principle). The same applies to service relationships between CENTROTEC and companies which are accounted for using the equity method. As the volume of transactions in the first six months was of lesser significance, it was classified as having no material 27 importance from the viewpoint of CENTROTEC, as a result of which it is not analysed in greater detail in this report. The CENTROSOLAR Group procured goods to the value of approx. EUR 6.2 million from the CENTROTEC Group. These consisted primarily of supplies of fixing devices and mounting systems for solar modules. CENTROTEC procured goods to the value of around EUR 2.0 million from the CENTROSOLAR Group. Investments accounted for using the equity method Where transactions take place with shareholders of CENTROSOLAR Group AG, which is accounted for using the equity method, the reporting company fundamentally has the option of recognising such transactions in an entirely income-neutral manner resulting in direct recognition of the effects within equity or of recognising the income effects in the income statement. The CENTROTEC Group exercises this option to the extent that the income effects from such transactions are reflected in the income statement (modified parent model). The gains shown in the income statement arose from the dilution of the interest in CENTROSOLAR Group AG, as CENTROTEC did not participate in a capital increase effected by CENTROSOLAR Group AG. The gain reported reflects the net result of two effects. On the one hand, new shareholders made a contribution to CENTROSOLAR Group AG in the context of a capital increase. This initially increased the entire shareholders' equity of CENTROSOLAR. In return, however, the new shareholders share in the equity that was hitherto allocable to the existing shareholders. As CENTROTEC did not participate in the capital increase, being an existing shareholder, it surrendered equity portions that

28 Explanatory Notes were hitherto allocable to it to the other shareholders. If a gain arises, this means that the new shareholders contributed a higher value, i.e. paid a premium, compared with the equity portion hitherto allocable to existing shareholders that was being surrendered to new shareholders. The resulting gain, which was also recognised in the equity investment result, amounts to EUR 1,065 thousand. Reportable security holdings and options The totals of reportable shares and stock options at June 30, 2008 are shown in the following table. Management Board Shares Options* Dr. Gert-Jan Huisman 65, ,284 Alfred Gaffal 7,000 99,000 Anton Hans 0 25,000 Pieter van der Poel 0 24,000 Dr. Christoph Traxler 3, ,330 Supervisory Board Guido A. Krass 2,400,000 0 Dr. Bernhard Heiss 0 0 Christian C. Pochtler 0 0 CENTROTEC Ordinary shares 16,536,296 0 Treasury stock 12,080 0 * The maximum possible number of options has been indicated. How many options can actually be exercised depends on the attainment of specified targets. Notices pursuant to Section 26 (1) of German Securities Trading Law (WpHG) Withdrawal of the voting rights notice published on July 23, 2007 pursuant to Section 21 (1) of German Securities Trading Law in respect of exceeding the 3 % threshold on July 11, 2007, and of the voting rights notice published on December 3, 2007 pursuant to Section 21 (1) of German Securities Trading Law in respect of exceeding the 5 % threshold on November 27, UBS AG, Zurich, Switzerland, notified us on July 15, 2008 that it withdraws the voting rights notices communicated to us on July 13, 2007 pursuant to Section 21 (1) of German Securities Trading Law in respect of exceeding the 3 % threshold in CENTROTEC Sustainable AG, Brilon, Germany, ISIN: DE , WKN: , on July 11, 2007, and also on November 30, 2007 in respect of exceeding the 5 % threshold in the same company on November 27, 2007, as no thresholds were passed at the dates indicated therein and therefore no obligation of notice existed. UBS AG, Zurich, Switzerland, notified us on July 15, 2008 pursuant to Section 21 (1) of German Securities Trading Law that its share of voting rights in CENTROTEC Sustainable AG, Brilon, Germany, ISIN: DE , WKN: exceeded the threshold of 3 % of voting rights on April 10, 2008 on the basis of its shares and is now 3.03 % (equivalent to 501,020 voting rights) % of the voting rights (equivalent to 348,667 voting rights) are allocable to the company pursuant to Section 22 (1), first sentence, item 1 of German Securities Trading Law. UBS AG, Zurich, Switzerland, notified us on July 15, 2008 pursuant to Section 21 (1) of German Securities Trading Law that its share of voting rights in CENTROTEC Sustainable AG, Brilon, Germany, ISIN: DE , WKN: fell below the threshold of 3 % of voting rights on April 24, 2008 on the basis of its shares and is now 2.74 % (equivalent to 453,020 voting rights). 2.11% of the voting rights (equivalent to 348,667 voting rights) are allocable to the company pursuant to Section 22 (1), first sentence, item 1 of German Securities Trading Law.

29 Explanatory Notes Impax Asset Management Limited, London, UK, notified us on April 24, 2008 pursuant to Section 21 (1) of German Securities Trading Law that its share of voting rights in CENTROTEC Sustainable AG, Brilon, Germany, ISIN: DE , securities identification number: , exceeded the threshold of 3 % of voting rights on July 10, 2007 on the basis of its shares and is now % (equivalent to 496,704 voting rights out of a total of 16,424,164 voting rights) % of the voting rights (equivalent to 496,704 voting rights) are allocable to the company pursuant to Section 22 (1), first sentence, item 6 of German Securities Trading Law. Furthermore Impax Group plc, London, UK, notified us on April 24, 2008 pursuant to Section 21 (1) of German Securities Trading Law that its share of voting rights in CENTROTEC Sustainable AG, Brilon, Germany, ISIN: DE , securities identification number: , exceeded the threshold of 3 % of voting rights on July 10, 2007 on the basis of its shares and is now % (equivalent to 496,704 voting rights out of a total of 16,424,164 voting rights) % of the voting rights (equivalent to 496,704 voting rights) are allocable to the company pursuant to Section 22 (1), first sentence, item 6 and second sentence of German Securities Trading Law. Dividend payments No dividend payment was made for the 2007 financial year, nor is such a payment envisaged for the current financial year. Changes on the Management Board Martin Beijer entered retirement at the start of April 2008 and therefore left the Management Board. 5. Significant events occurring after the first-half reporting date Centrotec Energiesparsysteme GmbH, Brilon, was established in July. This company will supply integrated energy-saving systems for buildings as well as provide management and other services in respect of the financing and routine operation of such systems and facilities, and in respect of their energy consumption. There were no further significant events after the reporting date for the quarter. Contingent liabilities There has been no significant change in contingent liabilities since the balance sheet date of December 31,

30 Explanatory Notes & Responsibility Statement by the Management 6. Management Board and Supervisory Board The members of the Management Board at the reporting date were: Dr. Gert-Jan Huisman, Nijkerk, Netherlands, merchant (Chairman); CEO Martin Beijer, Doesburg, Netherlands, merchant (until April 1, 2008); Gas Flue Systems Alfred Gaffal, Mainburg, Germany, merchant; Climate Systems Anton Hans, Apeldoorn, Netherlands, merchant (since January 1, 2008); CFO Pieter van der Poel, Velp, Netherlands, merchant; Gas Flue Systems Dr. Christoph Traxler, Fulda, Germany, physicist; Medical Technology & Engineering Plastics The members of the Supervisory Board at the reporting date were: Guido A. Krass, Wadhurst, United Kingdom, entrepreneur (Chairman) Dr. Bernhard Heiss, Munich, Germany, entrepreneur Christian C. Pochtler, MA, Vienna, Austria, entrepreneur 7. Other particulars Corporate Governance Code The Management Boards and Supervisory Boards of both CENTROTEC Sustainable AG and of CENTROSOLAR Group AG have, pursuant to Section 161 of German Stock Corporation Law, declared the extent to they have complied with and will comply with the recommendations of the Government Commission on the German Corporate Governance Code. The regularly submitted declarations and explanations are permanently available on the websites of CENTROTEC Sustainable AG and CENTROSOLAR Group AG. Responsibility Statement by the Management In accordance with German Securities Trading Law (WpHG) in conjunction with German Commercial Code (HGB), the Management Board declares: "To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim management report of the group includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group for the remaining months of the financial year." Brilon, August 14, 2008 Financial Calendar 2008 August 14 Publication of 02/2008 Quarterly Report Nov 11 Publication of 03/2008 Quarterly Report Aug Small Cap Conference, Frankfurt am Main Nov German Equity Forum, Frankfurt 30

31 _CENTROTEC Sustainable AG Am Patbergschen Dorn 9 D Brilon Tel. +49 (0) Fax +49 (0) ir@centrotec.de