English - Siegfried

Half-Year Report 2002

Key Figures1 st Half-Year 2002 1 st Half-Year 2001 Difference Change in %Net sales (CHF m.) 203.7 162.0 41.7 25.74Net income (CHF m.) 25.9 11.1 14.8 133.35Operating income before impairment and sale of companies (CHF m.) 36.8 15.9 20.9 131.45Net cash flow from operations (CHF m.) 28.2 1.9 26.3 1 384.21Capital expenditure (CHF m.) 32.8 26.7 6.1 22.85Personnel expenditure (CHF m.) 60.3 56.4 3.9 6.91Employees 1 (Number) 1 012 1 005 7.0 0.70June 30, 2002 December 31, 2001Equity (CHF m.) 350.5 341.3 9.2 2.70Total assets (CHF m.) 570.8 557.7 13.1 2.35Shareholder’s equity (Percent) 61 61 0.0 0.341Half-yearly average2Siegfried GroupSiegfried Group is a worldwide pharmaceutical and naturalproducts company with production sites in Switzerland, Germanyand the United States. As per year-end 2001, Siegfried had1 000 employees and reached net sales of 352.6 million Swissfrancs. Siegfried Holding AG is listed on the Swiss Stock Exchange(SWX: SFZN). The Siegfried Division provides pharmaceuticalfine chemicals and services and operates in four distinctbusiness areas: Siegfried Exclusives provides custom synthesisof patented active pharmaceutical ingredients for multinationalpharmaceutical companies – Siegfried Ventures offers integratedchemical, pharmaceutical and related services for newventure life science companies – Siegfried Generics developsand produces sophisticated Generics – Siegfried Actives focuseson attractive niche products. The Sidroga Division is mainlyactive in development, marketing and sales of high-quality naturalproducts, especially medicinal and herbal teas under the brandof Sidroga.

Siegfried increased operating income in first half-yearThe Siegfried Group, based in Zofingen, Switzerland, reportssales of CHF 203.7 million for the first half-year 2002 representingan increase of more than 25 % when compared to thesame period in the previous year (CHF 162.0 million). Operatingincome grew by 69.6 % during the first six months of 2002to CHF 36.8 million (CHF 21.7 million the previous year). Siegfriedreports a net profit of CHF 25.9 million, compared to CHF 11.1million in 2001. The satisfactory results for the first half-year aredue mainly to the continuing strong orders for the SiegfriedDivision which has strengthened its position as a leading supplierof Active Pharmaceutical Ingredients (API).The Siegfried Group in the first half-year 2002Siegfried DivisionSales of the companies combined in the Siegfried Division,namely Siegfried Ltd (Zofingen) and Siegfried (USA), Inc.(Pennsville, NJ), grew by 29.3 % to CHF 181.4 million. On thisbasis, operating income increased by 89.1 % to CHF 36.3million (adjusted amount the previous year: CHF 19.2 million).Siegfried Ltd in Zofingen again reported very good results.In particular, custom manufacturing (Siegfried Exclusives) andbusiness activity in generics (Siegfried Generics, SiegfriedActives) continued to develop positively. The newest businessarea, Siegfried Ventures, currently in the development phase,has achieved its targets.Growth of the Siegfried Division during the period under reviewis reported at a clearly higher level than for the first half-year2001, due mainly to the following non-recurring special factors:• In 2001 Zofingen focused on expanding capacity: in additionto structural measures, production in all key areas wasconverted to 7-day/24-hour operations. This resulted in ahigher production output as of the second half-year of 2001.• In the USA, Siegfried (USA), Inc. (formerly Ganes ChemicalsInc.) remained regulatory restrictions until June 2001, when ithas been able to return to unrestricted production.Sidroga DivisionIn the first half-year 2002, the Sidroga Division reported salesof CHF 22.3 million (+10.4 %) and operating income of CHF 0.5million (compared to an operating loss of CHF 3.3 million theprevious year). At the end of February Siegfried reacted to thecontinuing price decreases in the German food retail marketcaused by considerable over-capacity. and withdrew from thetea filling business by closing its plant in Bremen, Germany.Starting 1 July 2002, Siegfried’s Sidroga medicinal and wellnessteas are being packaged by a specialised company.In its core business, namely developing and marketing highqualitymedication with a natural basis and a focus on medicinalteas, Sidroga was able to win additional market share.OutlookBased on the satisfactory order outlook, the Siegfried Divisionexpects sales and operating income for the second half-year2002 to remain at a comparable level to the first half-year. Operatingprocesses are constantly adapted to the increasedbusiness volumes.The Sidroga Division will report considerably lower sales owingto its withdrawal from the tea filling business. The operatingincome situation of the Sidroga Division for the whole year willimprove significantly but will remain unsatisfactory.The necessary measures have been taken to limit the short-termeffects of the group exposure to foreign currencies, especiallythe US-Dollar.In general, the Group expects a very good result for the 2002financial year.3

Net Sales to Third PartiesDivisions 1 st Half-Year 2002 1 st Half-Year 2001 Change in %CHF m. CHF m. CHF Local currencySiegfried 181.4 141.8 28.0 29.3Sidroga 22.3 1 20.2 10.4 13.6Group 203.7 162.0 25.8 27.41See note 2.Operating ResultsDivisions 1 st Half-Year 2002 1 st Half-Year 2001 ChangeCHF m. CHF m. CHF m. in %Siegfried 36.3 19.2 1 17.1 89.1Sidroga before Asset Impairment 0.5 - 3.3 3.8./. Asset Impairment Sidroga 0.0 - 8.3 8.3Gain on sale of companies 0.0 14.1 - 14.1Group 36.8 21.7 15.1 69.61Corporate expenses separately disclosed in the previous year have been allocated to the operating segments.Consolidated Income StatementIn CHF m.41 st Half-Year 2002 1 st Half-Year 2001Net sales 203.7 162.0Manufacturing costs - 131.9 - 113.1Gross profit 71.8 48.9Other operating costs 1.8 3.1Restructuring costs - 36.8 - 36.1Operating income before impairment and sales 36.8 15.9Asset Impairment Sidroga 0.0 - 8.3Gain on sale of companies 0.0 14.1Operating income after impairment and sales 36.8 21.7Financial results, net - 3.2 - 1.5Other income and expenses 0.0 0.7Income before taxes 33.6 20.9Income taxes - 7.7 - 9.8Net income 25.9 11.1Earnings per share 95.54 40.69Consolidated Balance SheetIn CHF m.Assets June 30, 2002 December 31, 2001Non-current assets 348.3 344.2Current assets 222.5 213.5Total assets 570.8 557.7LiabilitiesShareholder’s equity 350.5 341.3Non-current liabilities 159.6 156.4Current liabilities 60.7 60.0Total liabilities 570.8 557.7

Consolidated Cash Flow StatementIn CHF m.Cash flow from operating activities 1 st Half-Year 2002 1 st Half-Year 2001Net income 25.9 11.1Depreciation 14.1 23.1Provisions and other positions 2.2 - 13.2Operating cash flow before changes inworking capital 42.2 21.0Change in working capital./. interest and taxes paid - 14.0 - 19.1Net cash flow from operating activities 28.2 1.9Net cash flow from investing activities - 27.7 21.9Net cash flow from financing activities 0.0 - 1.7Net increase (decrease) in cash 0.5 22.1Net effect of changes in exchange rate on cash - 0.1 1.9Cash at January 1 32.3 25.3Cash at June 30 32.7 49.31See note 5.1Shareholders' EquityIn CHF m.1 st Half-Year 2002 1 st Half-Year 2001At January 1 341.3 305.1Dividend 0.0 - 3.5Semi-annual income 25.9 11.1Increase of treasury stock - 3.2 0.0Translation difference - 13.5 15.2At June 30 350.5 327.95Market PricesIn CHF1998 1999 2000 2001 2002Registered share highest 2 119 1 560 1 620 1 570 1 725lowest 1 250 1 130 1 289 1 075 1 310at year-end 1 535 1 380 1 480 1 320at June 30 1 570Most important exchange ratesBalance sheet Final rates Final rates ChangeCurrency June 30, 2002 December 31, 2001 in %1 USD 1.49 1.68 - 11.21 EUR 1.47 1.48 - 0.7Income statement Average rates Average rates ChangeCurrency 1 st Half-Year 2002 1 st Half-Year 2001 in %1 USD 1.6267 1.7419 - 6.61 EUR 1.4686 1.5222 - 3.5

Notes to the Consolidated Financial StatementsAccounting principlesFinancial reporting is carried out in accordance with the currentInternational Accounting Standards (IAS). The principles ofaccounting are described in detail in the Siegfried Group 2001annual report.Close-down of production at Ostfriesische Tee-UnionGmbHOstfriesische Tee-Union GmbH, Bremen (D), a 100 % subsidiaryof Siegfried Deutschland Holding AG, Bad Säckingen (D),has ceased production as of June 30, 2002. Therefore theSidroga Division will not realise the respective sales to thirdparties in the second half of the year. In the first half year 2002these sales amounted to EUR 4.9 million (CHF 7.1 million).Intercompany loans/Shareholders' EquityUnrealized exchange rate differences on corporate loans havingthe nature of equity are recorded in shareholders' equity inaccordance with IAS 21.6Income taxes/Net incomeCapitalization of possible income tax credits have been reflectedin the first half year 2002. In the corresponding period2001, the capitalization of possible income tax credits in theUSA was waived. As a result, the income tax rate in the first halfyear 2001 was considerably higher compared to the first halfyear 2002.Net cash flow from investing activitiesThis position shows a cash inflow in the first half year 2001due to the proceeds from the sale of the agricultural businessactivities and Siegfried Chemicals Inc., Taiwan.

7Publisher’s NotesThis Half-Year Report is alsoavailable in German.Editor: Peter A. GehlerSiegfried Holding AGUntere Brühlstrasse 4CH - 4800 ZofingenPhone + 41 62 746 11 11Fax + 41 62 746 11 04