SEZ

SEZ Group Reports Third Quarter 2005 Results
- Order intake increased 11 percent quarter-over-quarter
- Slightly increased sales expectation for full-year 2005
- Continued pressure on margins expected for upcoming quarters

In the third quarter of 2005, the SEZ Group (SWX Swiss Exchange: SEZN) recorded an increase in order intake of 10.6 percent (to CHF 70.3 million) compared to the previous quarter, and again outperformed the market. Net sales were CHF 74.7 million and operating profit (EBIT) was recorded at CHF 0.3 million. Net profits for the period were CHF 0.6 million.

In the first nine months of business year 2005, SEZ increased net sales slightly from CHF 229.1 million in the first nine months of 2004 to CHF 231.2 million. Order intake was recorded at CHF 202.9 million (January to September 2004: CHF 246.8 million) and book-to-bill ratio was 0.88. Operating profit (EBIT) was CHF 6.6 million or 2.8 percent of net sales (EBIT-margin), and net profit was recorded at CHF 6.9 million, corresponding to a net profit margin of 3.0 percent.

Approximately 65 percent of net sales was for systems intended for 300-mm production. Additionally, demand for the company's innovative Da Vinci™ family continued to grow, as about 55 percent of SEZ systems sold this period were orders placed for this versatile product platform. With regard to global market trends, there was a noticeable increase in demand from the Japanese market for SEZ's single-wafer wet processing equipment.

Slightly higher sales expected for 2005; continued pressure on margins during next quarters
SEZ expects new order intake to remain healthy and to potentially increase during the remainder of 2005. As a result, SEZ's management slightly increased its expectations for net sales from approximately CHF 300 million to CHF 305 million for the full year 2005. Contrary to earlier expectations and despite already realized reduction of production costs, profitability will still be negatively impacted in the upcoming quarters. This impact is attributed specifically to ongoing price pressure and the high cost of market penetration.
The continued pressure on production costs of wafers with line widths below 90 nm forces leading chip manufacturers to replace conventional wet-bench systems with single-wafer wet processing technology for new, and even mainstream, commodity applications. To address this market need, SEZ consistently invests in the development of a complete portfolio for single-wafer wet processing. This cost intensive process is linked with a substantial opportunity to create new sales—potentially exceeding total sales of CHF 500 million in 2008 and beyond. Moreover, the effect of economies of scale supports improved margins.

Quarterly key figures (unaudited)

in CHF million	Q3/05	Q2/05	Q3/04
Order intake	70.3	63.6	83.0
Net sales	74.8	77.4	83.6
Operating income (EBIT)	0.3	1.4	11.6
Net profit	0.6	2.3	10.6
Order backlog end of period	51.6	53.8	88.9
Book-to-bill-ratio	0.94	0.82	0.99

Key figures after nine months (unaudited)

in CHF million	09/05	09/04
Order intake	202.9	246.8
Net sales	231.2	229.1
Operating income (EBIT)	6.6	35.5
Net profit	6.9	26.8
Order backlog end of period	51.6	88.9
Book-to-bill-ratio	0.88	1.08

Average exchange rates for January to September 2005:
EUR/CHF 1.54857; USD/CHF 1.22711

This press release includes tables of the results for consolidated income statements and balance sheets for SEZ Group's first nine months of 2005.

Conference Call
Today, 3 November 2005 at 9:30 a.m. (CET), the SEZ Group will conduct a conference call with analysts, investors and editors. A replay of the call will be available on the SEZ Group's website beginning at 6:00 p.m. (CET). To participate in the call, please dial into one of the following numbers:
+41 (0) 91 610 56 00 (Switzerland)
+44 (0) 20 7107 0611 (United Kingdom)
+43 (0) 1 928 9575 (Austria)
+49 (0) 69 2 2222 0593 (Germany)

Upcoming Financial Dates

12 January 2006	Press release announcing preliminary sales and order situation for 2005
30 March 2006	Press release and presentation announcing financial results for the full year 2005

About SEZ Group
The SEZ Group is the leading provider of single-wafer, wet-clean processing solutions for the global semiconductor industry, with an installed base of over 850 tools. The company maintains operations in Europe, Asia-Pacific, Japan and North America. Since 1996, registered shares of SEZ Holding Ltd. have been traded on the SWX Swiss Exchange under the symbol SEZN. Additional information about the company is available on the Internet at www.sez.com.