1 PFLEIDERER AG NINE-MONTH FINANCIAL REPORT 2007

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and is the region’s largest integrated manufacturer, the above-mentioned situation will create opportunities for the Company. Disclaimer This Report contains forward-looking statements based on management's current assessments of the Company's future development. Such statements are subject to risks and uncertainties that are beyond Pfleiderer's ability to control or assess precisely. This includes statements on the state of future market and economic conditions, the behavior of other market participants, the successful integration of new acquisitions, and the realization of expected synergy effects. 16 PFLEIDERER AG NINE-MONTH FINANCIAL REPORT 2007
Pfleiderer Shares Pfleiderer share price affected by U.S. real estate crisis Pfleiderer’s share price continued its positive performance at the beginning of 2007. The Company’s shares increased sharply to a high of €25.61 in the period up to mid-February, driven by strong revenues and earnings as well as the acquisition of the Swedish laminate flooring manufacturer Pergo AB, Stockholm. This corresponded to 25% growth as against the end of 2006 (€20.49). However, investor sentiment fell sharply toward the middle of the year due to the unexpectedly difficult situation on the North American engineered wood market, which partially eroded the Company’s share price gains. Pfleiderer shares closed June at €22.60. The situation continued to deteriorate in the third quarter of 2007 following the onset of the real estate crisis in the U.S.A. Fears arose that U.S. demand for engineered wood products could also come under pressure and that Pfleiderer could be affected more heavily than expected. At the beginning of August, the Company announced an extensive program to integrate Pergo in North America that would lead to extraordinary one-time costs in the current year. In this difficult environment Pfleiderer’s share price decreased to €15.72 before stabilizing at this level. The price at the end of September was €16.25 – down 20.7% on the 2006 closing price. Once the stock markets had settled, a large number of investors rated Pfleiderer’s comparatively low share price as an attractive investment opportunity in view of the Company’s growth potential. Pfleiderer shares then bounced back to over €18 by the middle of October. Market capitalization of the 53.326 million Pfleiderer ordinary shares was €867 million at the end of the reporting period, compared with €1,091 million as of December 31, 2006. Trading activity increased substantially as a result of the higher volatility on the stock market in 2007. A total of 96.9 million Pfleiderer shares were traded in the XETRA electronic trading system and in floor trading on the Frankfurt Stock Exchange in the period from January to September. This figure has already exceeded the total for full-year 2006, when 81.5 million share certificates changed hands. Average turnover per trading day amounted to 512,738 shares as against 319,614 in 2006. Share buyback program launched Pfleiderer AG announced a buyback of its shares on August 22, 2007. By the end of the year, the Company aims to repurchase up to 4,872,610 Pfleiderer shares, or around 9% of the share capital, via the stock exchange. Pfleiderer plans to use the acquired treasury shares to service subscription rights from stock option programs. The purchased share certificates are also an extremely flexible instrument for financing investments such as acquisitions, or for servicing convertible bonds. The Executive Board of Pfleiderer AG is convinced of the Company’s long-term earnings power. It therefore regards Pfleiderer’s share price – which from an operational perspective is at an unjustifiably low level – as an opportunity to successfully implement the buyback program and to use the acquired shares to optimally flank the growth strategy Pfleiderer is pursuing. 1.96 million Pfleiderer shares were acquired in the period up to October 9, 2007 inclusive, which amounts to approximately 40% of the overall target. 17 PFLEIDERER AG NINE-MONTH FINANCIAL REPORT 2007
Page 1 and 2: 1 PFLEIDERER AG NINE-MONTH FINANCIA
Page 3 and 4: Contents 4 Foreword by the Executiv
Page 5 and 6: It is our declared goal to maintain
Page 7 and 8: Sectors) and the Verband der Deutsc
Page 9 and 10: 2006, to €773.1 million at the en
Page 11 and 12: Pfleiderer’s encouraging business
Page 13 and 14: concretized in the form of specific
Page 15: In contrast to Europe, the situatio
Page 19 and 20: Balance Sheet of the Pfleiderer Gro
Page 21 and 22: Statement of Changes in Equity of t
Page 23 and 24: North America € thousands Jan. 1
Page 25 and 26: The following subsidiaries were inc
Page 27 and 28: Revenue recognition Revenues are ge
Page 29 and 30: Government grants Government assist
Page 31 and 32: The financial assets reported as lo
Page 33 and 34: The stock options allow Pfleiderer
Page 35 and 36: shareholders is expected to be comp
Page 37 and 38: 10. Repurchase of own shares to ser

1 PFLEIDERER AG NINE-MONTH FINANCIAL REPORT 2007

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