Buderus Reports Growth in Half Year to March 31, 1998; Sales Rise 8%, Pre-tax Profit Up 11%.

WETZLAR, Germany--(BUSINESS WIRE)--May 13, 1998--Buderus Group, AG, the Germany-based heating and specialty products group, reported continued success. In the first half of the financial year 1997/98 sales rose year-on-year by 8%, to DM 1,618 million (excluding the 1997 sale of the Aircraft Equipment division). The corresponding pre-tax group profit achieved an increase of 11% to DM 71 million. Business in the Group's Special Steel Products division was particularly successful, with an increase in sales of 25%. Despite the sustained slump in the construction industry, the Group's Castings division has been able to post a rise in sales of 6%. The largest group division, Heating Products, which is also the most important division for the Group's development, attained sales growth of 4%. Market share was won especially in the markets for heat generators. We remain optimistic regarding the further course of business in the current financial year. On the whole we are aiming at growth in both sales and profit for the financial year 1997/98.

Heating Products: Market position strengthened domestically and abroad

On the whole, the situation in the heating products markets is characterized by subdued demand. The Group's Heating Products division achieved sales of DM 1,039 million in this environment, which is 4% higher than last year. Turnover improved most markedly towards the end of the second financial quarter. The growth in sales was supported by domestic business as well as by our sales subsidiaries abroad. The successful Polish sales subsidiary and Solar Diamant Systemtechnik GmbH, which was acquired last year, were included in the consolidated financial statements for the first time. With regard to the product groups, the positive sales trend in heat generators is countered by a recessive trend in panel radiators and trade in heating accessories. Increased market shares were won especially with wall-hung and floor-standing heating appliances based on condensing technology. In its jubilee year, the group division is presenting itself with innovative products and concepts. New wall-hung heating appliances designed especially for use in houses with low heating requirements round off the product range. The range of digital electronic control panels has been extended for heating appliances in the higher output range. Tailor-made financing concepts are aimed at supporting our market partners.

Castings: Strong business internationally

The Group's Castings division attained year-on-year growth of 6% in sales, which amount to DM 298 million. Business was affected by the varying industrial cycles and higher levels of orders from abroad. It was thus possible to more than compensate for the losses resulting from the depressed state of the market in the domestic construction industry. The three areas of business, industry, cast-iron pipe systems, and construction and sewage contributed to sales growth in differing degrees.

In industrial business, Buderus was able to expand sales of brake disks to the European automobile industry and also its business with precision steel castings. The area of business cast-iron pipe systems profited from marked increases in exports to the Middle East. It was thus possible to more than compensate for weakness in domestic demand, especially in eastern Germany. Against the trend in the construction industry, the operations in construction and sewage were able to report a rise in sales. Positive effects resulted from orders of the cement sector for large projects in connection with the extension of the railway network. An expansion of the volume of business in the sector waste water treatment was achieved both domestically and internationally.

Special Steel Products attain strong growth

The trend of business in the Group's Special Steel Products division is distinguished by having the strongest growth within the Buderus Group. At DM 281 million, a 25% jump in sales was achieved. New orders and the state of the order book reached new records. The proportion of orders for export rose to 41%. The trend of orders in the sectors rolled materials and closed die forgings is particularly positive. For almost all product sectors, not only greater volumes but also higher revenues could be shown on the books.

Group profit has grown more strongly than sales

The profit before income-tax of the Buderus Group amounted to DM 71 million in the first six months of the financial year 1997/98. Adjusted for the group division Aircraft Equipment, which has been sold, this corresponds to a year-on-year increase of 11%. All the group divisions have contributed to this result, with profits that have risen more than proportionally to sales.

-0-

     Sales figures and trends for the group divisions

                  October to March    October to March      Percentage
Group division    1997/98 DM million  1996/97 DM million(a)     change

Heating Products  1,039                        998               +4
Castings            298                        282              + 6
Special Steel
 Products           281                        225             + 25

Buderus Group     1,618                      1,505              + 8

(a) excluding Aircraft Equipment

-0-

     Investments in production and sales network

     Apart from considerable direct investments in new products and
processes, and the enhancement of existing ones, the investment budget
plans approximately DM 160 million for tangible fixed asset
investments in the current financial year. The main focus is on
extending the international sales network of the group division
Heating Products. In the Castings division, the expansion of brake
disk production has been continued. The automation of the hot rolled
strip production line and the enlargement of forging capacity have
priority for investments in the Special Steel Products division.

     Higher number of employees

     As per March 31, 1998, 9,589 persons were employed by the Buderus
Group. When adjusted for the group division Aircraft Equipment, which
was still included in the financial statements at last year's
reporting date, the number of employees has increased by 322. The main
factors have been the inclusion of the Polish sales subsidiary as well
as the recently acquired Solar Diamant Systemtechnik GmbH in the
consolidated financial statements for the first time. The group
divisions Castings and Special Steel Products have slightly reduced
their workforces. Compared with the level at the end of the last
financial year (September 30, 1997), the number of employees on the
payroll of the Buderus Group has risen by 118.

     Perspectives: Expansion of sales - Strict cost management - Good
profit result

     The positive expectations for the further course of business in
this financial year are based not only on our strong domestic business
but also on good, sustained demand on foreign markets. For the full
year 1997/98 we proceed on the assumption that the previous year's
sales figure of DM 3,257 million will be exceeded, as planned. We are
paying particular attention to the cost and profit situation and are
confident that we will be able to extrapolate the profit trend of the
first half of the year.

-0-

Buderus Group in Figures

                      October to March  October to March    Percentage
                               1996/97           1997/98        change
                            DM million     DM million(a)

External turnover            1,618                 1,505       + 8
         domestic            1,128                 1,077       + 5
    international              490                   428      + 14

Pretax profit                   71                    64      + 11

Investments                     49                    42      + 17

Depreciation                    54                    60      - 10

Employees
   (as per March 31, 1998)   9,589                 9,267       + 3

(a) excluding Aircraft Equipment

-0-

Information on Buderus, a world leader in heating, specialty steel products and castings is available on Bloomberg under the symbol BUD GR and on Reuters under BUDG.O. Additional information is available on Buderus Group AG's home page: http://www.buderus.de.

CONTACT: Klaus Soer

Investor Relations

Buderus AG

011-49-6441-418-1739

or

James Prout

Taylor Rafferty Associates

212-889-4350