High Raw Material Prices To Hit Uster’s Sales

Unexpected Deterioration in Economic Situation - 2008 revenue expected to be around CHF 150 million, Strong EBITA margins of 22% - 24%

Uster Technologies Ltd, the leading high technology instrument manufacturer of products for quality measurement & certification for the textile industry, announced an update on its 2008 outlook.

At the half year, declines in consumer spending, strong currencies (China and India), high raw material prices and over-supply of yarn were having an impact on Uster Technologies’ client base, which were reflected in significantly reduced investments in production machinery.

Nevertheless,investments in testing systems were still at good levels. However, the recent deterioration of the world’s finance and banking sector has had major impacts on economies worldwide, which was not foreseen at the half year.

This results in a negative impact on Uster’s customers’ investment plans and along with restricted ability to obtain credit, has led to a further decline in demand for machinery as well as testing systems. As a consequence, for the full year 2008, Uster Technologies expects revenues to be around CHF 150 million (compared to CHF 187 million in the previous year).

In spite of the demanding economic situation, the Company’s flexible business model & low cost base allows Uster Technologies to keep its strong EBITA margin in the range of 22% – 24%. The net result is expected still to increase significantly compared to the previous year.

This improvement is mainly due to a lower cost level, lack of one-time items and a decrease in interest expense following the refinancing after last year’s IPO.

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