INTERIM REPORT September 2004

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• Alexander van der Lof (CEO)

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1. Developments 1st _{half year 2004 Alexander van der Lof}

2. Results 1st half year 2004 Jan Vaandrager

3. Developments, strategy

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Financial

(in million €) H1 H1 2004 2003 Difference Turnover 212.2 190.0 + 11.7% Operating result 15.7 10.6 + 48.1% Net profit 9.9 4.3 +130.2%

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• Market conditions:

• (Outdoor) telecom, construction and installation sector continuing difficult circumstances – above all impact on turnover and growth of Cable group, but also impact on Technical Trading group

• Growth sectors communication, safety, care and comfortcompensate for difficult market conditions

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Telecom Solutions

Outdoor Telecom Market

Growing need for broadband solutions

• Copper networks

• Pressure on prices and fall in investment volume compared to las t year • Expectation – increasing need to update networks - VDSL

• Optical fibre networks – market conditions unchanged: still difficult

• Volume global market optical fibre fell slightly - Further fall in price single mode (15%) • Production volume single mode TKH increased by 30%

• Still limited increase in volume TKH multi-mode

• Interest in FTTH increasing amongst others Citynet Amsterdam • Joint venture agreement PacketFront – Expansion of portfolio

• Advanced software and hardware for broadband networks • Reacts to simplification and cost savings client connections

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Telecom Solutions

Outdoor Telecom Market Activities in Asia

• Base stations mobile networks - Indonesia

• Sharply growing market – market penetration of mobile phones still limited - 6% • Position of TKH growing

• Fibre optic networks – China

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Telecom Solutions

Souce: CRU 0 5 10 15 20 25 30 35 40 45

Nov '00 Mar '00 Jul '00 Nov '01 Mar '02 Jul '02 Nov '02 Mar '03 Jul '03 Nov '03 Mar '04 Jul '04

Development of optical fibre price

single mode

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Telecom Solutions

Source: CRU 0 10 20 30 40 50 60 70 80 90 100 110

Nov '00 Mar '01 Jul '01 Nov '01 Mar '02 Jul '02 Nov '02 May '03 Jul '03 Nov '03 Mar '04 Jul '04

50/125 62.5/125

Development of optical fibre price

multi-mode

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Telecom Solutions

Indoor Telecom Market

• Dect telephony – limited growth of market

• Position TKH strengthened by innovative solutions - market share increased

• TKH partner in “Green Wire” campaign KPN with Boston 530 (daily promotion on TV)

• Broadband connections – market continuing to grow at high level

• Home Networking-portfolio Eminent®_{: - increasing interest in supply chain solutions –}

strong position NL

• Penetration TKH outside NL

• Small Office Home Office market – sharp increase in volume

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Telecom Solutions

Indoor Telecom Market – expansion of portfolio

• TKH has acquired the exclusive rights to a total solution for time-shifted TV

• Reacts to great needs of network operators, hospitals, hotels, e tc. to offer “triple play”-services (telephony, Internet and TV)

• Unique solution – suitable for copper and fibre optic infrastructure – 3 Mb connection • Relatively low connection costs per client – digital quality TV

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Building Solutions

• Reluctant investments in construction and installation sector

• Negative effect on turnover and margin in Cable group

• Negative effect on turnover and margin in NL Technical Trading g roup

• Project – flight information system Changi Airport Singapore – partly compensates difficult market conditions

• Investments in efficiency solutions partly compensates difficult market conditions

• Central control room concepts – multi-storey car parks, bridges, tunnels, locks

• Care sector – communication solutions – care for the elderly • Expansion of portfolio – “care” wrist band

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Building Solutions

• Interesting projects NL:

• Cell communication for the “Eikenstein” borstal in Zeist

• Communication system for the “Veldhuizen” health centre in De Meern • Domotics and audio surveillance system in “Veldhuizen” assisted living

centre in Middelharnis

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Industrial Solutions

Turnover share 44.3% (H1 2003: 44.1%)

Increase in investment level for industry

• Control technology

• High degree of innovation leads to increase in turnover

• Specialty cable

• Increase in turnover in all segments: medical, automotive, machinery and robot industry

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Industrial Solutions

Tyre-building systems • Positive development

• Improved profitability tyre-building industry – higher investment level • Shortage of means of production for tyres with larger rim diameters • High investment level Asia

• Innovative solutions

• Expansion of product portfolio

Product handling systems

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1

st

half year 2004

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1

st

half year 2004

in € million

H1 H1 H2

2004 2003 2003

Turnover 212.2 190.0 193.9

Costs of raw materials and consumables - 118.5 - 105.4 - 108.7

Gross margin 93.7 44.1% 84.644.2% 85.2 43.9%

Operating expenses 77.9 74.0 71.9

Operating result 15.8 7.4% 10.6 5.6% 13.3 6.9%

Financial result - 1.1 - 2.2 - 1.8 Result before taxes 14.7 8.4 11.5

Taxes - 4.8 - 4.1 - 3.8

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H1 2004

Machine-ry group 21% Techn. Trading group 34% Cable group 45%

Whole year 2003

Cable group 45% Techn. Trading group 36% Machine-ry groep 19%

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H1 2004

Whole year 2003

E.U. 31% Europe (other) 5% USA 5% Asia 9% other 2% Nether-lands 48% E.U. 32% Europe (other) 1% USA 3% Asia 13% other 2% Nether-lands 49%

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• Gross margin remained practically the same (44.1%)

• Increase in total operating expenses by € 3.9 million due to increased activity of Machinery group and Cable group

• Fall in financial expenses to € 1.1 million • Tax burden: 32.7%

• Net profit more than doubled to € 9.9 million (H1 2003: € 4.3 million)

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5.6 11.3 3.4 8.6 ROS % 7.4 14.9 4.6 9.1 ROS % 2004 6.9 13.3 10.6 15.7 Total -2.7 -2.3 - 2.6 Other 16.1 6.6 4.3 8.0 Machinery group 4.4 3.9 3.1 4.3 Cable group 8.2 5.5 5.5 6.0 Technical Trading group

(sum in millions of €) ROS % H2 H1 H1 2003

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30-6-2004 31-12-2003 30-6-2003 Assets Fixed assets 121.3 122.1 127.8 Inventories 85.6 71.2 81.7 Receivables 81.8 79.7 83.9 Cash 6.1 7.9 7.0 Total 294.8 280.9 300.4 Liabilities Shareholders’ equity 157.6 156.3 144.1 Provisions 18.5 18.4 19.5 Long-term debts 26.9 26.8 67.3 Short-term debts 91.8 79.4 69.5 Total 294.8 280.9 300.4

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7.49 4.69 14.68 ICR 55.6% 47.9% 53.5% Solvability 38.8% 50.6% 30.4% Gearing (net debt / equity)¹

1.29 1.81

0.93 Net debt / EBITDA¹

H2 H1

H1

2003 2004

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2004 2003

Operating result 15.7 23.9

Depreciation 6.8 13.7

Changes in provisions 0.0 -3.9

Changes in working capital -9.6 14.3

Cash flow from operations 12.9 48.0

Interest paid / received - 1.5 - 5.2

Income tax on profit - 2.6 - 1.0

Other 0.0 - 0.1

Cash flow from operating activities 8.8 41.7

Cash flow from investments - 5.8 - 7.9

Cash flow from financing activities - 8.6 - 52.0

Changes in available funds - 5.6 -18.2

Cash 6.1 7.8

Funds owed to credit institutions - 22.8 - 18.9

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and outlook

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General focus:

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Focus core activities on:

Telecom Solutions

Building Solutions

Communication, safety, care and comfort Industrial Solutions

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- TKF - TFO - VMC - Elspec - Isolectra -C&C -Intronics Telecom Solutions Telecom Solutions -TKF -Isolectra -Elspec -VMC -C&C Specialty cable Specialty cable - TKD -Jobarco -Capable - E&E - Eldra

- TKF Specialty cableSpecialty cable

Telecom VAR Telecom VAR Preform & fibre

production

- TKF

- TFO Telecom VARTelecom VAR

- VMC - Elspec - Isolectra - C&C Optical fibre cable & copper cable Optical fibre cable & copper cable -TKF -ZTC - TKF - TFO - TFO - TKF Optical fibre cable & copper cable Optical fibre cable & copper cable - VMC - Elspec - Isolectra - C&C Electrical Engineering VAR Electrical Engineering VAR Installation cable / Power cable Installation cable / Power cable -TKF -Eldra -Isolectra -EKB -VMC -Elspec -C&C -Intronics Building Solutions Building Solutions Indoor Telecom (ICT) Outdoor Telecom Electrical engineering Specialty

Market Value added

reselling Solutions & Value added Services Development Production and Assembly Raw material production

- TFO Preform & fibre_production

-EKB -VMI -E&E -TKF -EBM -TKD Industrial Solutions Industrial Solutions - VMI - EBM - EKB Tyre-building Producthandling systems Tyre-building Producthandling systems Steering systems Steering systems - VMI - EBM - EKB Industry _{- EKB} 44,3% 28,0% 27,7%

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Acquisitions:

• Machinery group - strengthened portfolio Industrial Solutions – take-over of AZ on 01-08-2004

– Turnover: € 8 million – Number of employees: 30

– Locations: Cham (Nürnberg) à production Munich and Akron (USA) à sales offices • The take-over will positively contribute to TKH’s profit as of 2005

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Acquisitions:

• TKH’s objective – Emphasis on strengthening Technical Trading activities – portfolio Telecom and Building Solutions

• Aim: 1 - 3 acquisitions per annum • Profile :

• Size € 10 – € 30 million turnover

• Good management – No turn-around situations • North-west and Eastern Europe

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• First half year 2004 confirms good progress in the execution of the TKH strategy

• Development ROS from 6.2 to 7.4%

• Progress of strategy’s implementation still behind target and market opportunities

• Further investment in TKH organisation – talent acquisition

• Difficult market conditions require a lot of additional attentio n from the current organisation

• Emphasis on copying success formulas and successful solutions within the group • Expansion of portfolio with successful solutions

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Technical Trading group

• Autonomous growth and growth through acquisitions • Overlap in portfolio 60%

• Focus on value-added reselling

• Introduction of products in early stage of the life cycle

• Innovations > 20% of portfolio introduced during the past two years

• Geographic focus on North-West and Eastern Europe and Asia

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Cable group

• Autonomous growth – Increase in use of capacity • Focus on niche markets (> 80%)

• Positioning of group for future growth of FTTH • Increase in share of system sales

• Innovation >20% of portfolio introduced during the past two years

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Machinery group

• Autonomous growth on the basis of innovations launched and new innovations

• Acquisitions aimed at complementary range and strengthening leading position

• Innovations with the emphasis on exceptional costs

effective technology – high return on investment for clients • Focus on leading position in a select number of industries

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Financial objectives

• To be achieved within 3 years

(in 2006)

H1 whole

2004 2003

• ROS > 7% 7.4% 6.2%

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• The market conditions in the outdoor telecom, construction and installation sector are expected to remain difficult during the second half year and above all have a negative effect on the Cable group and to a limited degree also on the Technical Trading group.

• As a result of the strong euro, the margin of the Machinery group will fall in the second half of 2004. However, the Machinery group does have a well-filled order portfolio.

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• The developments in the field of speciality cable and total solutions in the growth sectors of communication, safety, comfor t and care are positive.

• Partly on the basis of the result achieved during the first half year of 2004, the net profit for the whole year is expected to be substantially higher than for the whole of 2003.

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