Sales Advance in Germany and Asia

On January 26, 2005, the company had announced its withdrawal from DVD systems business. This decision significantly influenced the company’s results for the year 2004. The non-recurring costs of withdrawal had an € 8.9 million impact on operating profit and a € 5.5 million impact on net income. Without the write-offs for DVD business, virtually all of the company’s key numbers would have been up sharply from the year before. Moreover, the company’s sales and earnings were also burdened by the weakness of the U.S. dollar. Various details about the development of sales: In the countries of Europe outside Germany, sales advanced by 2.1 % from € 48.3 to

€ 49.3 million.

Sales developed on an especially encouraging note in Germany, rising by 16.3 % from € 40.4 to € 47.0 million. The company’s largest German customers come from the fields of coating and analysis.

Converted to euros for consolidation, sales in the United States rose by only 1.0 % from € 32.8 to € 33.1 million due to the weak exchange rate of the dollar. On a dollar to dollar comparison basis, sales in the U.S. increased by 11.5 % from US$ 37.2 million in 2003 to US$ 41.4 million in 2004.

The highest sales growth was posted in Asia and the rest of the world, where sales advanced by 18.8 % from € 22.5 to € 26.8 million. One half of these sales were generated in Japan; Taiwan, China and Korea are additional major sales markets.

Pfeiffer Vacuum’s most important product continues to be the highly profitable turbopump. Sales of this family of pumps rose by 11 % from € 53.6 to € 59.4 million. This high-tech product is required for manufacturing any number of things that are used in modern life. Vacuum products from Pfeiffer are employed, for example, to coat architectural glass, to fabricate semiconductor components and analytical equipment for the fields of medicine and the environment and to produce CDs and DVDs.

Ranking second in order of importance are vacuum gauges and mass spectrometers, whose sales increased by 20.8 % from € 35.2 to € 42.5. Primarily advancing in this segment were sales of leak detectors used in industrial applications and of mass spectrometers for the analytical industry.

Capital investments in the year 2004 totaled € 3.4 million, as opposed to € 1.9 million the year before, representing an increase of more than 77 %. Capital spending focused first and foremost on modern machinery and IT equipment. Liquid assets rose by € 15.6 million from € 29.4 to € 45.0 million. Given the high level of cash on hand, the Management and Supervisory Boards will propose to the Annual Shareholders Meeting that a dividend of € 0.40 and a bonus of € 0.50 be distributed, representing an increase of nearly 30 percent.

The company’s Chief Executive Officer Wolfgang Dondorf: “We’re going into the year with cautious optimism. We naturally have no influence on such external factors as the development of the U.S. dollar, high oil prices, rising raw materials prices and the general development of the economy. But we have done our homework: We’re putting lots of money into developing new products as well as our presence in existing and future markets. By focusing on our core business and with new products from all product segments and for all market segments, we will again grow our sales this year and work extremely profitably. A book-to-bill ratio of 1.12 for the first two months of 2005 gives us reason for cautious optimism. A return to the kind of 19 % EBIT margins we earned during our highly successful 2000 fiscal year would appear to be feasible.”