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HELM AG – undergoing change as time marches on

Press release - 27 February 2006

Fiscal year 2005 once again brought forward the HELM Group as a whole. It was possible to outperform even the very good previous years both in sales revenues and Group earnings.

The targeted development launched years ago from a traditional trading company to an international marketing group in the chemicals industry as a long-term partner for producers of chemical and pharmaceutical raw materials as well as for the manufacturing industry successfully continued. Both volumes and market share were boosted substantially for numerous key products.

Petrochemicals and Pharma in particular contributed to this success in 2005.

The Group’s parent company, HELM AG, Hamburg, once again accounted for the lion’s share of sales revenues and earnings. Among the branches and holdings in Europe, the locations in Scandinavia, England, Benelux, Portugal, Turkey and Russia made the biggest contribution to Group earnings; in the Americas, the most successful locations were the United States, Mexico and Trinidad, and in Asia, China ranked first and foremost.

The preliminary figures of the global consolidated annual financial statements are as follows:

- in EUR million -

  2005 2004 Change in %
Sales Revenues      
- Global sales revenues 4,700 4,094 + 14.8
- External sales revenues, cons. 2,600 2,229 + 16.7
       
Earnings      
- Earnings on ordinary
  business activities		 53.0 50.7 +  4.5

- Group net income for the year
  after taxes

 35.0 31.5 + 11.1

Thanks to these encouraging results, the level of equity will be extended and will grow from EUR 133 million to reach EUR 160 million.

This will give HELM the independence it needs for the further forward-looking expansion of its international chemicals marketing activities.

The current sales network, with subsidiaries and holdings in 31 countries, will be expanded at a regional level with sales offices being established at new locations in

The reinforcement of the supply base for key products is being continued with investments in Oman for methanol, production scheduled to commence in 2007 and in Saudi Arabia for acetic acid and vinyl acetate monomers, production scheduled to commence at the end of 2008.

In addition, production commitments will be assumed in Trinidad for 1.4 million metric tonnes p.a. of UAN = liquid urea ammonium nitrate (production scheduled to commence in 2009) as well as 60,000 metric tonnes p.a. of melamine in the same year.

The Group’s total investment volume currently amounts to EUR 50 million p.a.

The global workforce of the HELM Group comprises 1,173 employees, 479 of whom are based in Germany, with almost no change being recorded year-on-year.

The discussion on the topic of locations, which is quite common in numerous companies, is no issue at Helm AG. With international business accounting for more than 80%, there certainly would be more ideal conditions in other countries in terms of economic, social or political factors. However, the Executive Board and the Company’s shareholders are expressly committed to the location of Germany and to the Free and Hanseatic City of Hamburg in particular.

The fact that Hamburg is non-negotiable as a location is also attributable to the Hamburg business community and, in particular, the merchants engaging in foreign trade, the number, quality and internationality of which in Europe is available only here on the Elbe river.

The corporate policy objective for 2006 is to achieve worldwide consolidation for the Group at a high level.

Expectations for the current fiscal year are reflected in the consolidated figures below:

  2006 2005
- Global sales revenues EUR   4.7 bn EUR   4.7 bn
- Earnings on ordinary
  business activities		 EUR 48 mn EUR 53 mn

The investments, projects and quality enhancements launched within the Group in recent years indicate that further positive development is in store following the consolidation phase.

H E L M   A G