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TWST: Let’s begin with a quick introduction to Deutscher Industrie Service (DE:501690), including a brief historical sketch and a picture of how the company is positioned today?

Mr. De Daniel: The Company was established in 1967 and the growth was strong organically. We made an IPO in 1997 at a share price adjusted for Euro conversion and for share splits by around 8.69 and we are focusing on the specialized temping market in Germany and in Austria. DIS is in terms of volume number 5th in Germany. The German temping market is very fragmented. The biggest five companies in the German temping market have only a market share of around 30% and DIS has a market share of roughly 4.1%, but in the qualified area we are the market leader. In terms of the German temping market, 75% of the market is industrial blue-collar business and half of this 75% is in the unskilled area; that’s not our business. We are focusing on the qualified segment where we have a market share of around 20%. We have five clearly separate business divisions. The biggest division is industrial services. This is qualified blue collar people, representing 30% of the overall group, and the point to make here is that these workers are clearly more qualified than in the whole market. The qualifications of a company you see by the gross margins because only if you lease to your clients qualified people, the clients pay you a certain price. In the mass market, in the unskilled segment, the people are more or less comparable and there’s strong competition. But in the qualified segment the people are not so comparable so you have the better gross margins. In this area we reach a gross margin of 32.5%, whereas in the whole market the gross margin is below 20 %. The second biggest part of group is office management. There we lease qualified secretaries, bank clerks, marketing people and so on. It has roughly 28% of sales. Then the third area is engineering, which is a very qualified area with highly qualified engineers. That accounts around 25%t of sales. We then we have two smaller parts, IT and finance. Finance does not mean banking; it is accounting, control, and certain IT work.

TWST: What objectives and milestones would you like to reach over the next 12 to 24 months?

Mr. Daniel: For 2003 I see clearly an ongoing weak economy and therefore a sales decline for the whole company of around 5% and earnings down around 9%. On the other hand, we see some improvements in our early cycle areas like engineering and industry. There we have seen in the first quarter, small sale growth. For 2004, it is difficult to say today whether we will see an upswing or not. But if we get a slight upswing, then I see top line growth of 10% to 15%, driven by market share gains and normal organic growth economy related because with this trade unions contract, all these small players which have had in the past given low wages will be bankrupt. They will have to increase the salaries by 30 or 40 percent because they paid so badly, but they will not able to increase the price by the same rate. As a specialized supplier, we have a clear advantage and I see good signs that we can gain their market share.

TWST: Will that involve acquisitions?

Mr. Daniel: We like to acquire in the engineering segment. We see our company focused on organic growth, but in the engineering segment we would like to acquire because this segment is a specialized area and it takes a very long time to get the confidence of your client. You know, it is clearly a different business. If, for example, a secretary makes a wrong typo then sure it is not good, but it is not disastrous. But if you construct a bracket for Porsche and there’s something wrong then you have a big problem. So compared to the other areas it takes very long time to get the confidence of the client in the engineering segment.

TWST: What do you see as your main challenge going forward?

Mr. Daniel: Our challenges are clearly that with the next upswing and with the things we already have in place, there is a very strong potential growth rate in the whole market and we will have to be ready for that. We are growing stronger because we are best positioned because the company’s need more flexibility and these laws are changing so there will be a better environment and we can live with this trade unions contract.