Grammer : Letter to the shareholders on the first half of 2017

Dear shareholders,

For GRAMMER AG, the first half of 2017 was dominated by the implementation of our strategy for profitable growth and our activities for protecting our independent position as a reliable partner to the automotive industry.

Thanks to the outstanding support of the shareholders at the Annual General Meeting held in May 2017, all of management's proposals were accepted with a large majority. At the same time, all the motions submitted by minority shareholder Cascade were rejected, thus preventing it from gaining control over the Company.

The very high presence of almost 70% of the Company's share capital at the Annual General Meeting and the clear outcome of shareholder voting against the plans being pursued by a minority shareholder constitute clear support for the Company's management. A large majority of the shareholders expressed their support for the continuation of the strategy of profitable growth, internationalization and innovation and their rejection of the efforts by a minority shareholder to gain control. Accordingly, the results of the shareholder votes at the Annual General Meeting mark an important milestone and constitute a crucial signal confirming that GRAMMER will remain a reliable partner to its customers also in the long term.

Our shareholder structure has continued to stabilize since the Annual General Meeting. JAP Capital Holding GmbH, a company affiliated with our strategic partner Ningbo Jifeng, has increased its share in our Company to over 20% and is now GRAMMER AG's largest shareholder. On the basis of the current shareholder structure, the possibility of significant negative influence being exerted or even a change of control in the future can be almost entirely excluded.

As a result, the Company is now able to fully concentrate on continuing its successful growth strategy. We are making intensive efforts to generate new business and are confident that our customers will appreciate the successful endeavors to stabilize our shareholder structure and therefore continue the long-term business relations. Therefore it is important for the future development of the Company that we are able to win major new projects being tendered by the OEMs in the second half-year.

At the same time, we are intensively working to further increase our operating profitability. The figures for the first half of the year show impressively that the GRAMMER Group has remained on the successful trajectory of the last few years. With revenue of EUR 908 million and an operating EBIT margin of 4.8% at the end of the first six months, we are firmly on track towards achieving our ambitious full-year targets for 2017.

As a specialist in automotive interiors, GRAMMER is not affected by current discussion on the consequences of the exhaust emissions produced by combustion engines. Our high-quality and innovative interior components are used in all vehicle models regardless of the type of engine. Moreover, all the principal trends in the automotive sector will lead to a massive upgrade in vehicle interiors. Accordingly, the functionality and design of interiors will increasingly form the underpinnings for future-generation passenger and commercial vehicles.

As a reliable partner to the international automotive industry with a stable shareholder structure, GRAMMER AG can thus face the future with great optimism and continue its successful growth strategy.

Yours sincerely,

Executive Board of GRAMMER AG

Hartmut Müller Gérard Cordonnier Manfred Pretscher

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