FORBO HOLDING AG ANNUAL

Board of Directors

the Board of Directors Ladies and Gentlemen, following the 1999 General Meeting of Shareholders the Board of Directors reconstituted itself,replacing the previous Board Committee with three new ones:an Audit and Finance Committee,a Corporate Development Committee and a Committee for Human Resources and Remuneration.This reorganiza- tion ensures that the work of the Board of Directors is dealt with efficiently. As previously announced,we conducted a thorough review of our company’s overall business strategy in the year under review.This process resulted in the formulation and adoption of a new strategy,whose overarching objective is to bring about a sustained enhancement of enterprise value.In the next few pages Werner Kummer,CEO,gives an in-depth report on the Group’s strategic renewal. Well-Equipped for the Future Impressive increase The results for the 1999 business year tell a clear story:we are approaching the in earnings future with greater strength.On sales of CHF 1,874.4 million,2.3% up on the previous year,we achieved an impressive 12.3 % increase in consolidated profit,taking it to a total of CHF 86.1 million (before specific provisions for the strategic reorganization amounting to CHF 70 million after tax).The restructuring measures introduced in previous years and the Group’s efforts to keep costs under control made an important contribution towards this positive result.In addition,we can safely say that our product portfolio is well- positioned in our major markets,finding strong and widespread acceptance in the face of stiff competition.Forbo is well-equipped to vigorously pursue new and ambitious objectives. Unchanged Net profit for 1999 reported by Forbo Holding SA totalled CHF 33.5 million dividend (previous year:CHF 33.0 million).In the light of this result the Board of Directors proposes that the General Meeting of Shareholders approve payment of a dividend of CHF 22 per registered share,unchanged from the previous year.The total dividend distribution thus amounts to CHF 32.4 million (previ- ous year:CHF 32.4 million),with the number of shares in circulation remain- ing the same as in the previous year. Personnel Changes Board of Directors The term ofoffice ofDr.Ivo Gerster will expire with effect from the date ofthe forthcoming Annual General Meeting ofShareholders.Dr.Ivo Gerster is standing for re-election for a one-year term ofoffice,at