1 PFLEIDERER AG NINE-MONTH FINANCIAL REPORT 2007

Strategic development in Eastern Europe fully on schedule
Pfleiderer is systematically expanding its production capacity to leverage the major growth potential
offered by the Eastern European market in the medium and long term. A new particleboard plant in
Novgorod, Russia, was inaugurated at the end of 2006. Both the raw particleboard capacity and the
coating facilities were expanded in the course of the third quarter due to high sales volumes and to
reflect the strong demand expected in the coming years. The expansion of capacity impacted results
in August and September in particular. However, production output for raw particleboard is increased
to over 500 thousand cubic meters, while the volume for raw particleboard coating will rise to 20
million square meters.
A state-of-the-art production facility for medium-density fiberboard in Grajewo, Poland, began shift
operations in mid-2007. In July, the Group also resolved to build another plant in Novgorod to
produce medium- and high-density fiberboard. The new Russian MDF plant is scheduled to begin
production in mid-2009.
Improvement in earnings
Pfleiderer’s strong revenue development in Eastern Europe led to an improvement in earnings in the
reporting period, with cumulative EBITDA up by 26.0% to €51.3 million. At 18.3%, however, the
EBITDA margin was slightly below the comparable prior-year figure of 19.7% due to the expansion
measures mentioned above. EBITDA amounted to €17.0 million in the third quarter (€15.4 million).
As the measures initiated incurred costs only temporarily, but at the same time improved the
efficiency and profitability of the two plants, margins are expected to increase over the remainder of
the year.
North America
Difficult market environment
In North America, business in the third quarter remained dominated by weak consumer spending in
the U.S.A., which affected sales of laminate flooring and fiberboard. Pfleiderer, too, was impacted by
this difficult environment. Including Pergo’s activities, revenues for the period from July to September
2007 amounted to €113.3 million, compared with €97.9 million in the prior-year quarter, which did not
include Pergo. The business volume totaled €334.3 million in the first nine months of 2007, as
against €273.5 million in the previous year.
Integration of Pergo fully on schedule
The acquisition of Pergo has enabled Pfleiderer to significantly expand its strategic position in North
America, while the merger of Pergo’s and Uniboard’s activities has made Pfleiderer the leading
provider of both particleboard and laminate flooring. Despite difficult conditions in the sector in 2007,
the Company kept sales volumes stable and hence increased its share of the North American
laminate flooring market from an initial 15% to 20%. This strong base is a key requirement for further
development of the North American market, for which double-digit growth rates are forecast in the
medium term.
In addition to strengthening Pfleiderer’s market position, the integration of Pergo will allow the
Company to leverage substantial synergies, leading to savings in excess of €25 million in 2008 and
approximately €30 million in 2009. A large proportion of the planned effects have already been
12 PFLEIDERER AG NINE-MONTH FINANCIAL REPORT 2007