Schlatter Group in financial year 2016

The rapidly implemented measures taken the previous year to counter the strength of the Swiss franc against the euro and other currencies produced the intended effect in the 2016 financial year. The concerted development efforts made in past years in all product areas are having a positive impact on the Group's market performance: Schlatter was able to gain market share through the launch of new products. No fundamental change in the market environment is expected for 2017, and both the market positioning and the launch of new products give confidence. The sharply increased order intake guarantees full utilisation of capacity at both the Schlieren and Münster sites beyond the middle of the year. The target for the 2017 financial year is to achieve a profit that exceeds that of the previous year.

Welding segment

In the welding segment, order intake increased to CHF 86.7 million (2015: CHF 58.4 million), while net sales rose to CHF 69.8 million (2015: CHF 66.7 million). The comparatively high order intake includes two large orders for a combined total of CHF 17.5 million. The order backlog at year-end amounted to CHF 42.1 million (December 31, 2015: CHF 25.3 million).

Equipment for the production of reinforcement wire mesh

After a slump in steel prices during 2015, which had a negative impact on investment in installations for the production of reinforcement mesh, they then recovered slightly in the 2016 financial year. Despite the slight improvement, the area of installations for the production of reinforcement mesh continues to be confronted with excess capacity and considerable price pressure.

In the core European markets in the field of installations for reinforcing mesh production, the market is increasingly dominated by large industrial groups, which are now modernising their production facilities. Schlatter has benefited from this development, winning a number of large orders. In the southern countries of Europe, investment in reinforcement mesh installations has been a rarity since the start of the financial crisis.

In south-east Asia there is evidence of strong demand for flexible, highly productive and rapidly upgradeable reinforcing mesh installations. In a number of Central American countries and the emerging markets generally, there is strong demand in places for high-performance machinery for standardised reinforcing mesh.

In Brazil, the most important South American market, there are still no signs of recovery. In Russia, the collapse of the rouble, the unstable political environment and the persistent economic crisis are depressing investment sentiment.

Equipment for the production of industrial wire mesh

Numerous orders were acquired in the area of installations for industrial mesh production, particularly in Northern Europe and the USA. This area of installations is growing slightly due to the various application areas in different industries. For example, the growth of online trading has boosted demand for mesh solutions for the storage of packages. Owing to the rising demand for automation, growth potential is becoming apparent in China too in the area of installations for industrial mesh production; this is currently manifesting itself in the form of higher demand for used installations.

In 2016, Schlatter invested both money and resources in developing mesh production in markets where we have previously had only a low-key presence, and is expecting to generate its first sales in these regions over the course of the 2017 financial year.

Installations for rail welding

While the market for mobile rail welding systems proved subdued, the market for stationary machinery remained stable. However, growth in this profitable market is unlikely to be achieved to any meaningful degree, as Schlatter is a niche player and any expansion of the product offering would mean competing with major groups that enjoy an established market presence.

Weaving segment

The weaving segment generated order intake of CHF 21.0 million in the 2016 financial year (2015: CHF 14.5 million). Net sales rose to CHF 20.7 million in the reporting year (2015: CHF 16.5 million). The growth in sales in the 2016 financial year was achieved through machinery for the production of paper machine clothing; the sales volume in the wire-weaving machine area accounted for some 15% of the segment total. The order backlog as at December 31, 2016 stood at CHF 6.9 million (December 31, 2015: CHF 6.6 million).

After a difficult prior year, a modest recovery was evident in the weaving market for paper machine clothing. This was primarily attributable to the slight pick-up in demand from Asia, with major projects being realised in China in particular. In Western markets, the focus of customer activities remains on the optimisation of existing production sites.

The Schlatter Group believes the market has now stabilised somewhat, however, and anticipates order intake in the 2017 financial year matching the previous year's figure. We believe sales have bottomed out in this area. The restructuring initiated in 2015 was completed in 2016, and capacities are now fully utilised.

Outlook

The successful innovation initiative of recent years and the improved market environment are helping to boost business at the Schlatter Group. Schlatter is well positioned for the 2017 financial year, despite the challenging currency situation and the strong franc in particular. After an above-average increase in order intake in 2016, it is expected to return to normal in the financial year of 2017. The marketing drive, which has included the establishment of additional sales resources in the emerging markets and the opening of a sales and service facility in China, continues to be implemented as per schedule. The package of measures to expand the service business is likewise still being rolled out. Other focal points include efficiency drives to shorten throughput times in customer projects and make our organisation more flexible. For the 2017 financial year, the Board of Directors and Group Management are targeting an increase in profit on the previous year.

Annual General Meeting 2016

The Board of Directors will recommend to the General Meeting of Schlatter Industries AG on May 4, 2017, that the company should not make a dividend payment for the 2016 financial year.

The full 2016 Annual Report can be downloaded from the Schlatter Group website:

http://www.schlattergroup.com/en/investor-relations/downloads/gb2016.pdf

Further Information

Schlatter Industries AG

Werner Schmidli

Chief Executive Officer

Telephone +41 44 732 71 70

Mobile +41 79 343 62 62

Fax +41 44 732 45 02

werner.schmidli@schlattergroup.com

Agenda

Schlatter Group (www.schlattergroup.com)

The Schlatter Group is one of the leading specialists in plant engineering for resistance welding systems as well as weaving and finishing equipment for the production of paper machine clothing, wire fabrics and wire mesh. Thanks to its many years of experience in the field of plant technology, its innovative strength and its reliable service, the Schlatter Group - which is listed on the Swiss Reporting Standard of SIX Swiss Exchange - guarantees its customers a range of powerful and high-quality production equipment.

This media information contains certain forward-looking statements including statements using the words "believes", "assumes", "expects" or formulations of a similar kind. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which could lead to substantial differences between the actual future results, the financial situation, the development or performance of the Company and those either expressed or implied by such statements. Such factors include, among other things: competition from other companies, the effects and risks of new technologies, the Company's continuing capital requirements, financing costs, delays in the integration of acquisitions, changes in the operating expenses, the Company's ability to recruit and retain qualified employees, unfavorable changes in the applicable tax laws, and other factors identified in this communication. In view of these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company accepts no obligation to continue to report or update such forward-looking statements or adjust

them to future events or developments.

Key figures of the Schlatter Group

1 Net financial position (debt): cash and cash equivalents less interest-bearing liabilities

2 Gearing: net financial position divided by equity

3 Cash flow from operating activites less purchase of tangible fixed assets and intangible assets, plus sale of tangible fixed assets and intangible assets

4 Net result divided by average equity

5 Determined on the basis of dividend-entitled shares

6 In accordance to the proposal to the Annual General Meeting of May 4, 2017