Report for the First Quarter of 2005:

Total sales slightly up on year, sales growth of 18% in Germany, operating result EUR 6,000, equity ratio 76%

aap Implantate AG, a German medical company that operates in the fields of implants for fracture healing and joint replacement, bone cements and cementing techniques, bone replacement materials and carrier materials for antibiotics, posted sales of EUR 3.125 million in the first quarter of 2005 (previous year: EUR 3.06 million). After securing major new customers in Germany, the company was able to achieve a marked increase in German sales, reporting an 18% increase. Due to postponement of large international orders until the second half of 2005, foreign sales were down 34% in the first quarter.

After substantial expansion of personnel resources in research and development, the group posted reduced EBITDA of EUR 337,000 in the first quarter of 2005 (previous year: EUR 773,000). EBIT was EUR 6,000, down on the previous year’s EUR 352,000.

The group’s net earnings were EUR minus 65,000 for the first quarter 2005 (previous year: EUR minus 19,000). The balance sheet total, EUR 20.3 million, and the equity ratio of 76% both remain at the level of December 31, 2004.

As seen now, aap Implantate AG is able to confirm the statement made on publication of its annual result for 2004, that it is set to achieve double-digit growth in sales and a return to profitability in the full year 2005.