COST OPTIMIZATION AND ORGANIZATION STRENGTHENING.

Stahl’s management implemented a plan to optimize fixed costs and improve operations, thereby boosting the company’s profi tability, a trend that is expected to continue in 2008. The new CEO, Huub van Beijeren, has successfully simplifi ed the organization and strengthened the global management team with a new Director of Manufacturing and Director of Purchasing and Logistics. Fixed cost optimisation actions were started in June mainly in Europe and the USA. As a result operational costs excluding depreciation and amortization were almost 4 million euros lower in the second half year than in the fi rst half year in 2007.

FOCUS ON ASIA.

A new General Manager China was appointed to lead the growth in this important market and to capitalize on the launch of the new Suzhou plant (China) This 17.5 million US dollar investment provides Stahl with access to parts of the Chinese market previously untapped due to high import duties, transport costs and long lead times. The unit has been on trial production in early 2007 and sales took off in the second half of the year. Furthermore, leather fi nish sales staff has been doubled in Asia in the last 2 years, refl ecting Stahl’s continuous efforts to strengthen its market positions.

OUTLOOK

The outlook for 2008 is positive, capturing the full year benefits of the restructuring in 2007, focusing on growth in Asia Pacific and further working capital improvements. Stahl expects to be in a better position than competition to benefit from the opportunities which are offered by the market in both leather and high performance coating.