Manz AG — Interim / Quarterly Report 2010

May 11, 2010

EFFICIENT SOLUTIONS FOR A SUSTAINABLE FUTURE 3-MONTH REPORT 2010 MADE BY MANZ

Financial Calendar 2010

June 22, 2010	Annual General Meeting
August 10, 2010	Semi-Annual Report
November 8, 2010	9-Month Report
November 22–24, 2010	German Equity Forum

Over view of Group Results
in EUR million	January 1 to March 31, 2010	January 1 to March 31, 2009
Revenues	21.33	16.49
Total operating revenues	34.29	21.30
EBIT	–3.31	–4.96
EBIT margin (in %)	–	–
EBT	–3.21	–4.87
Consolidated net result	–2.72	–4.69
Earnings per share	–0.62	–0.96
Operating cash flow	–8.0	5.25
Equity ratio (in %)	79.9	79.0*
Net debt	–69.0	–78.8*
* as of Dec. 31, 2009

To Our Shareholders

005	Manz Automation AG Mission Statement
006	Letter to the Shareholders
010	Manz Automation AG Shares

Group Interim Report

014	Business Report
031	Events After the Balance Sheet Date
031	Risk Analysis and Forecast

Consolidated Interim Financial Statement & Notes

035	Consolidated Interim Financial Statement
041		Notes to the Consolidated Interim Finacial Statement

Title: Vocational training made by manz

The cover photo shows some of our young trainees, who represent extremely important parts of our corporate culture and positioning: Sustainability, future technology, and responsibility. These young colleagues enrich our company with their high level of dedication as well as truly individual skills and interests.

Manz Automation views itself as a high-tech equipment manufacturer. Our goal is to develop machines and systems for fast-growing industries around the world that are on the cusp of becoming attractive mass markets. In pursuit of this goal, our strategy is to innovate at a fast pace, improving existing products and creating new solutions that offer our clients competitive advantages. In this regard, our high level of technological expertise forms the foundation upon which our company is built. Our primary focus is on the photovoltaics and flat panel display industries but, at the same time, we always remain open to new trends and growth-industries (e.g. lithium-ion batteries). Thanks to our core area of expertise – automating processes and developing innovative systems – our solutions have applications in a wide variety of industries. Living and breathing the art of engineering day in and day out rapidly leads us to become familiar with further processes, which allows us to develop new, powerful products. At Manz, research and development are a top priority. This spirit of invention spurs us on each and every day – and drives our company's dynamic growth.

Letter to the Shareholders

Dear Shareholders,

Turnaround: New orders worth approximately 50 million euros acquired

During the first three months of 2010, we experienced a significant business upturn. Thanks to a rebounding solar and flat panel display (FPD) market, we have managed to acquire orders totaling 50 million euros. As a result, all divisions registered good capacity utilization during the first quarter, and at the beginning of the year we were able to discontinue the short-time work introduced on May 1, 2009.

The improved market situation was not yet fully reflected in the reporting period's revenues and earnings. In the first three months of the year, we generated revenues of 21.33 million euros after generating 16.49 million euros in the same period last year. This corresponds to a year-on-year growth of 29.4%. In terms of earnings before interest and taxes (EBIT), we recorded a loss for the period of –3.31 million euros, as against –4.96 million euros last year. Thus, our consolidated result for the period totaled –2.72 million euros (previous year: –4.69 million euros).

Investments in research and development for a leading technological market position

In our view, the main reason for the strong growth in new business during this early market recovery phase primarily lies in our intensive research and development activities over recent months, coupled with our strong market position in Asia. Our goal is and will remain to hold on to our technological leadership and further strengthen our position. That is why we have taken the strategic decision to energetically push forward with and expand our R&D activities during the current year, investing roughly the same amount as last year in this sphere. Our R&D efforts will concentrate both on developing our vacuum coating technology into a further core area of expertise and on improving wet-chemical processes. In addition, it is our goal to further integrate production lines. During 2010 then, the chief focus of our activities will be on dynamic corporate growth coupled with undiminished research and development efforts.

In order to ensure a successful future for the enterprise, we have also been working on our long-term plans. These include our strategic goal of further enhancing the value-added element on the crystalline solar cell and thin-film solar module production lines. The establishment of our new subsidiary Manz Dünnschichttechnologie GmbH (now: Manz Coating GmbH) in December 2010 brings us one step closer to achieving this goal, as it means we are now running a vacuum coating technology development center in Karlstein (Hanau/Aschaffenburg region/Germany) near Frankfurt. This technology forms a central component of any thin-film production line, since the process involves depositing the initial layers on the glass substrate via an evaporation technique. The development and planned installation of these systems will increase the future value-added element by thin-film and crystalline technology machines developed and produced by the Manz Group by over 90%. This extremely high proportion of machines produced in house will facilitate the complete integration of individual machines and processes, permitting further cuts in production-line costs and allowing potential efficiency increases to be better exploited. During the course of the year, we aim to further expand the new team and bundle together all the skills needed for the development of vacuum coating equipment and processes at the Karlstein center.

The development of vacuum coating technology as a further core competence will open up significant medium-term sales potential, that's why entering this segment is a key strategic step for Manz with a view to further driving the company's growth. The company plans to produce the machines at Manz facilities in Europe and Asia, and the new technology is expected to start contributing to our revenues from mid-2011 onwards.

During 2010 we shall also be focusing our efforts on innovative products in the growth market of lithium-ion batteries. As well as equipment and machinery for individual processes, Manz offers full automation for the production of lithium-ion batteries. We aim to increase our expertise in this new line of business in the future, so that Manz will be able to participate in the excellent opportunities afforded by this growth market.

Current market prospects, discussions with our customers, and new orders that we have already received all back up our positive expectations regarding 2010 business trends. In addition, our R&D activities have succeeded in gaining us further market share, and we aim to continue pursuing this course with our new products. However, many of our clients are continuing to suffer the effects of the financial and economic crisis, as a result of which we are still having to charge lower prices than in a record-breaking 2008. During the course of the year, this is likely to be reflected in Manz Automation's revenues, but, regardless of this, the sale of to date six newly developed back-end lines has proven a major success and confidence booster. Based on our order books as of the end of the first quarter, with orders totaling 77.5 million euros, all divisions will be fully occupied until mid-2010, and, in particular, our production centers in Asia have significantly more orders than available capacity.

We are convinced that 2010 will see Manz Automation return to solid growth, and are expecting an increase in revenues of at least 50% compared to last year (total revenue 2009: 85.9 million euros). Depending on further market developments, particularly in the field of thin-film technology, we might be able to achieve and even exceed this goal. For constructing production Development of further core competence in the field of vacuum coating technology

High order backlog amounts to 77.5 million euros

Expected increase in revenues of at least 50%

lines in the area of thin-film technology involves high investment costs and generally required external financing. Accordingly, the earlier such projects are executed by our customers, the more positive the effect on the company's earnings and revenues will be. Currently, however, it is difficult to predict when the thin-film segment will begin to revive. Irrespective of this, our high equity ratio of some 80%, coupled with liquid assets of around 73 million euros, mean that we are well positioned to successfully implement the planned growth.

Our future goals are, then, clearly defined:

• To continue increasing our technological market leadership through innovation,
• To further increase coverage of the value chain and to expand integration of the processing stages,
• To play an active role in mechanical engineering market consolidation,
• To boost production capacity in Asia in order to exploit cost advantages, and
• To build up our foreign locations

Our overarching aim is to remain a leading equipment supplier both to the FPD and solar industry and for new growth industries.

We would like to take this opportunity to thank our shareholders, customers, suppliers, and strategic partners for the confidence they have shown in us. And a special thank-you goes to our employees whose hard work and dedication throughout the year once again made a major contribution to the success of Manz Automation.

The Managing Board

CEO CFO COO

Manz Automation AG SHARES

Overview //

Market capitalization (March 31, 2010): 270 million euros

Manz Automation AG stock has been listed on the Frankfurt Stock Exchange's regulated market (Prime Standard segment) since July 2008. In 2009 the stock markets were dominated by the fallout of the financial and economic crisis, and its impact can still be felt in 2010, finding its expression in high levels of volatility. Meanwhile, the financial markets are also wary of the consequences of a possible sovereign default by Greece. At the beginning of 2010 these uncertainties had a massive impact on the bond market and the euro, and, despite a generally upward trend, movements on the bond markets have proven uneven and highly sectoral in nature.

Manz's stock started in the new year on January 4, 2010, at a price of 68.81 euros, followed the next day by what is to date this year's high of 70.10 euros. Thereafter, the stock followed the general downward market trend also reflected in comparable indices such as TecDax and Prime IG Renewable Energies Index (ISIN DE0007237810), reaching its lowest point to date of 54.40 euros on February 25, 2010. However, an appraisal of the Prime IG Renewable Energies Index shows that Manz Automation's stock performed better than the industry average. In March, a moderate overall market recovery coupled with positive company news boosted the price of Manz stock, which closed out the quarter on March 31, 2010, at a price of 59.37 euros, corresponding to market capitalization of some 270 million euros.

Key Data
German Securities Identification Number	A0JQ5U
International Securities Identification Number	DE000A0JQ5U3
Ticker Symbol	M5Z
Stock Market Segment	Regulated market (Prime Standard)
Type of Stock	Registered, common, no-par value bearer shares each with a proportionate value of 1.00 euro of capital stock
Capital Stock	4,480,054 euros
Number of shares in circulation	4,480,054

Shareholder Structure //

Currently at 50.81%, Manz Automation has a large proportion of shares in free float and a wide shareholder base. On the reporting date March 31, 2010, company founder and chairman of the Managing Board, Dieter Manz, held 44.49% of Manz's shares, while Ulrike Manz has a 4.70% holding.

014	Business Report
014	Company Situation
014	Market and Competitive Environment
024	Employees
025	Research & Development
026	Earnings Position
029	Assets Position
030	Liquidity Position

031 Events After the Balance Sheet Date

031 Risk Analysis and Forecast

Group Interim Report

Business Report

Company situation

Market and Competitive Environment //

Economic Environment

2009 was a year of recession across the economy as a whole. The international financial and economic crisis led to a drop in global economic output. After adjusting for price changes and variations in numbers of working days, this led to a 4.9% fall in Germany's gross domestic product (GDP).

In the eurozone, growth stagnated during the final quarter of 2009 as compared with the previous quarter. The main reason for this was lack of internal demand – and, according to the ifo Institute for Economic Research, 2010 will see continuing economic pressures exerted throughout the eurozone. These will include the termination of fiscal support packages, the continuing credit squeeze, and a difficult labor market, which will continue to depress demand, as the Society for Consumer Research Association (Gesellschaft für Konsumforschung – GfK) also confirms.

Experts expect economic recovery in 2010

Despite enduringly unstable, risk-laden economic trends, experts are overall anticipating an economic recovery during 2010. For 2010 the German Council of Economic Experts (Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung) is forecasting national GDP growth of 1.6%, while the IMF is forecasting global economic growth of some 3.9%, a figure that is expected to rise to around 4.3% in 2011.

The German Machinery and Plant Manufacturing Association (Verband Deutscher Maschinenund Anlagenbauer – VDMA) has registered equally positive trends. Orders received by German machinery manufacturers have slowly recovered, with the number of incoming orders in February 2010 some 26% above the 2009 figure. The chief contributor to this development was foreign demand, which grew 32%, while domestic demand registered an increase of 16% in February. Asia provided the main impetus here, whereas demand remains sluggish in the eurozone and the USA.

Thanks to our innovative range of products and consequent competitive advantage, Manz Automation expects the macroeconomic recovery to deliver sustained positive growth prospects for our company. As soon as the markets have recovered and clients begin to receive the financing they need, we anticipate that the demand for investment goods will once again increase.

As a result of the global economic crisis, the photovoltaic industry experienced significantly more sluggish growth in 2009 than in previous years. Banks were unwilling to lend, leading to a global decline in the number of investments made. Intensive R&D activities by Manz Automation during the past fiscal year have spawned innovative technologies, which enable manufacturers to effectively combat growing cost pressure through the use of the latest equipment. Highly efficient and seamlessly integrated machines from Manz allow production costs to be cut and facilitate the more efficient production of solar cells and modules. The mechanical engineering sector is driving innovation within the industry and, as a result, PV technology will also be able to compete with conventional electricity generation in Central Europe within the next four years, thus achieving grid parity.1 // 1 Information from BSW-Solar

At international level, grid parity could also be achieved much sooner than previously assumed, because major overcapacity means that the price of photovoltaic equipment has fallen sharply. Analysts from HWM Research expect many countries to reach grid parity by 2012. Consequently, they anticipate a massive boom in demand over the medium to long term – above all, initially in countries with long sunshine hours and high electricity prices.

Economic crisis provides opportunity for research and development

Achievement of grid parity will unleash a solar boom

Relationship between grid parity and market growth

source: HWM Research, June 2009

Adjustment of the New Electronic Business Act (EGG) creates significant need for investment by manufacturers

Experts at the Swiss bank Sarasin believe the global PV market will experience a strong recovery during 2010. The German PV industry can be expected to participate in this recovery, since German solar companies were in the past a driving force behind the dynamic worldwide growth experienced by the sector. This can primarily be traced back to attractive potential returns, the rapid decline in solar module prices, and low current interest rates. As a result of this rampant growth, the German government is considering amendments to the Renewable Energy Act (Erneuerbare-Energien-Gesetz – EEG). This means that manufacturers will have to make major new investments in order to cut manufacturing costs to match lower price levels. All in all, as one of the industry's leading equipment suppliers, Manz Automation views this as a positive pointer for future growth.

According to European Photovoltaic Industry Association (EPIA) figures, 6.4 GW of new capacity was installed in 2009, taking the current installed rated output to over 20 GW. For 2010 the EPIA is even more optimistic, expecting total worldwide growth of 40%. Last year, Germany was by some distance the largest photovoltaic market, followed by Italy, the USA, and Japan. According to the Federal Network Agency (Bundesnetzagentur), the total output of installed PV facilities rose by 3.8 GW in 2009 to 9.8 GW. This represents annual growth of 60%, and a 50% share of the worldwide installed capacity in 2009. The markets in India and China are viewed as particularly promising over the coming years, since a great many projects in both countries are currently at the planning stage.

India offers optimal conditions for photovoltaic equipment

India _ By 2050 a total of 20 billion US dollars will have been be invested in national photovoltaic power subsidies. This should result in the creation of a nationwide capacity totaling approximately 200 GW. Initially, the country is aspiring to reach a capacity of 20 GW by 2020. For comparison, current global PV output is estimated at around 20 GW. Thus far, the country generates a negligible amount of solar electricity, but the subcontinent offers more than 300 days of sunshine a year, ample space, and excellent conditions – for instance, in the state of Gujarat, where projects with a total output of 500 MW will be subsidized by 2014 alone.

The ever-increasing impact of these subsidy programs means that an enormous growth spurt can be expected over the coming years. The plan is to finance the subsidies through higher taxes on gasoline and diesel fuel, both of which are currently highly subsidized.

Furthermore, there is huge potential demand in India, as some 80,000 villages are not connected to the national power grid, and water pumps are still driven by some nine million diesel generators. Over the coming years, the country plans to replace these generators with solar-powered equipment. Another application is in the field of cellular communications. About 90,000 additional cell towers were built in 2009. Diesel generators are also used to power these towers, but the plan is to use solar equipment as backup systems to provide them with additional electricity. The move toward cellular phones in India continues unabated. More than 11 million handsets are sold every month, which means that there is a growing demand to expand local cellular networks.2 // 2 GTI: "Indian Solar Industry Feeling Optimistic" – July 24, 2009

Manz Automation can also benefit from these trends. In order to establish a local solar industry, the first thing needed is powerful state-of-the-art equipment of the kind our company offers. Recently, suppliers and manufacturers in India have begun ramping up operations along the entire value chain, that's why Manz has been represented in four different locations in India by a subsidiary since October 2008.

USA _ According to a study by Greentech Media (GTM), the United States could become the world's second-largest and, at the same time, fastest-growing market by 2012.3 The key factor upon which these positive assumptions rest is the achievement of grid parity in the states of California, Arizona, New Mexico, and New Jersey, and experts predict that this will have spread to 11 states by 2012. This suggests that the ambitious plans of Governor Schwarzenegger to increase the percentage of electricity generated from renewable energy in California to 33% by 2020 are entirely realistic. This will be possible since the cost of generating electricity from photovoltaics will continue to decline, closing the gap between solar power and conventional electricity generation. Over the medium term, the US plans to increase the percentage of energy generated from renewable sources from the current 9% to 25%.

// 3 Greentech Media (GTM): "The United States PV Market Through 2013: Project Economics, Policy, Demand, and Strategy"

Trend of demand due to administrative targets by state (regulatory case).

source : Greentech Media (GTM) – "The United States PV Market Through 2013: Project Economics, Policy, Demand and Strategy" India needs modern, high-performance equipment

Experts see the USA as the growth market of the future

China strives for an independent and self-supporting solar industry

China _ China is aiming to establish an independent and self-supporting solar industry. In this context, the entire manufacturing value chain needs to be covered, and solar power plants meeting the country's own energy demands must be operated. The China Renewable Energy Scale-up Program (CRESP), launched jointly with the World Bank and set to run for 10–12 years, means that China will play an increasingly important role in the field of renewable energies. For instance, solar plants with a capacity of more than 50 KW will be subsidized at a rate of USD 2.93 per watt. This plan will primarily benefit the Chinese solar industry, but Manz Automation will be able to participate in this subsidy program indirectly, since the major Chinese solar manufacturers – Yingli Green Energy and Suntech – are both clients of our company. Furthermore, the Chinese authorities plan to expand the percentage of renewable energy used in the country to 23% by 2020, corresponding to an average annual increase of 6% to 7%. With our own manufacturing and sales facilities in China and Taiwan, Manz Automation is extremely well positioned in the Asian market, meaning that we will gain significant medium-term benefits from these trends.

The solar industry will become increasingly less dependent on trends in individual key markets

Long-Term Prospects _ Taking a long view of the solar industry, we can make an initial assumption that various individual markets will exceed 500 MW of newly installed PV output in 2010 or 2011. As a result, the industry will become decreasingly dependent on trends in individual key markets, as is still currently the case in Germany. That is why experts at Sarasin Bank take an optimistic view of the future, forecasting average annual growth of approximately 30% between 2012 and 2020. As a result, they expect newly installed PV output to reach 155 GW in 2020, and significantly higher dynamic growth will be seen, particularly in the markets outside of Europe.

source: Sarasin Bank, November 2009

Thin-Film Solar Module Segment _ Previously analysts had been forecasting a 2012 market share of up to 23% for thin-film technology. However, this segment was hit especially hard by the global economic crisis, since thin-film production equipment requires significantly higher initial investments than crystalline technology. At the same time, the spot price of silicon has dropped so dramatically that the cost benefit per watt as compared to crystalline modules has also shrunk dramatically, almost to the point of nonexistence. But aside from these points, thin-film solar modules are still attractive from a technical standpoint. Due to lower temperature coefficients, this technology is superior, specifically in regions with high ambient temperatures, and the energy output of modules made with thin-film technology is also higher than that of crystalline technology in areas with diffuse lighting conditions. Finally, the amount of space available also determines which technology is better suited for a given application.

Current forecasts for 2010 are more conservative than previous assumptions, with experts anticipating a production in 2010 of around 3.1 GW, rising to 4.1 GW in 2011. Even so, average growth rates (CAGR) from 2008 to 2012 will still exceed those of the entire solar market by 50%. Thus, the expansion of production capacities will largely be postponed until 2011.4

// 4 Bank Sarasin – Study: "Solar Industry – A Green Recovery in Sight," 2009

History of electricity generation from various PV technologies

In its study entitled "Set for 2020," the EPIA predicts that thin-film technology will play an important role in generating electricity with photovoltaics.

By successfully combining years of experience in the fields of wet-chemistry system solutions, LCD production, and applications for the production of thin-film solar modules, the Manz Group has built up its position as an equipment supplier with a global reputation. The company is the only supplier outside of Asia with long-term experience in safely handling large glass substrates under cleanroom conditions.

Flat Panel Display (FPD) Division – previously systems.lcd

The flat panel display market comprises all products involving flat screens. These include such products as LCD TVs, notebooks, cellular phones, and MP3 players with an LCD or plasma screen. All in all, 2009 was a highly successful year for the FPD industry, with a growth rate of over 32%, similar to the figure registered in 2008. In markets such as China and Japan, the year was even more successful than 2008, despite the global recession.

Experts are expecting sales of 170 to 180 million LCD units in 2010

Analysts expect sales figures to continue rising, particularly those for large-size LCD displays. Experts are expecting sales of 170 to 180 million LCD units in 2010. In 2009 China was the strongest market driving industry growth.5 Since the beginning of 2009 the People's Republic has subsidized purchases of LCD televisions6 and, as a result, a 77% increase is forecast for the Chinese market alone, a figure that translates into sales of 22.6 million flat screen TVs.7 But sales increased in North America and Western Europe in 2009 as well. While digitization via HDTV boosted revenues in Europe, substantial discounts led to an increased demand for stateof-the-art units in the USA.8 // 5 IT Times: "LCD Monitor Sales Set to Reach 180 Million Units Next Year" – December 30, 2009 // 6 Channel Partner: "China Considering Even Larger Lifeline for the LCD TV Industry" – October 21, 2009 // 7 Channel Partner: "Manufacturers of LCD Panels Rush to China" – September 4, 2009 // 8 ZDnet.de: "LCD TVs will Overcome the Crisis

in 2010" – December 31, 2009

The future market will be driven primarily by more efficient LCD TVs (green technology), touch panels for mobile units, and, above all, the use of innovative LED backlights, 3D technology, and Internet connectivity. In 2009 3.6 million LED-LCD units were sold, and analysts forecast that almost ten times that figure will be sold in 2010, as sales soar to 35 million units, representing 20% of worldwide TV sales.9 Apart from being more energy efficient and having a thinner form factor, the benefits of backlit technology lie in its higher frame rate, higher color contrast ratio, and improved black level.10 As a result, investments in the latest generation of manufacturing equipment are essential both to future market growth and for efficient, costeffective manufacturing processes. As a leading global supplier of systems for handling glass substrates and wet-chemical cleaning, Manz Automation will benefit from the current trends in the FPD market. // 9 DisplaySearch: "LCD TVs to Exceed 180 Million Units in 2010" – March 23, 2010 // 10 allesdigital.

20

at: "LED-LCD TVs on the Rise" – May 10, 2009

GLOBAL XEV MARKET FORECAST MARKET FCST TYPE (XEV PENETRATION %'S)

MARKET FCST BY REGION

source: Deutsche Bank, Electric Vehicles: Plugged In 2, November 2009

New Business Division – previously system.aico

The new division – New Business – is the successor of parts of the former systems.aico segment. It is responsible for our activities in the fields of lithium-ion batteries and life sciences, among other things.

Since July 2009 Manz has participated in an industrial partnership within an innovation alliance to conduct "production research on high-performance lithium-ion batteries for electric-powered transportation." The goal of this research project is to explore new manufacturing technologies and apply them to the mass production of lithium-ion battery systems. In order for the

Lithium-ion technology as a driving force for the future

EUROPEAN XEV PENETRATION BY TYPE (2015 AND 2020)

Source: Deutsche Bank, Electric Vehicles: Plugged In 2, November 2009

market for electric vehicles to succeed, high-quality lithium-ion cells, batteries, and battery components must be mass produced to a consistently high standard, and a sustainable supply chain must be created. Only industrial-scale production can significantly reduce the costs of battery systems to the point where they become an economically viable market option. The project will drive forward both new industrial manufacturing technologies and automation solutions, and system integration and production-process planning solutions for battery-cell manufacturers will be devised. A study conducted by HSBC forecasts that, in the electric vehicles sector, cars powered by lithium-ion technology will command a market share of 87% by 2020.11 Through our participation in this industrial partnership, Manz Automation has created an outstanding initial position from which to establish ourselves in the long term as a leading system supplier in this dynamic growth market. // 11 HSBC: "Hybrids and Electric Vehicles" – November 2009 Mild Hybrid Full/Plug-In Hybrid PHEV EV ICE 89% 2% 77% 6% 2% 1% 4% 8%

Germany to become leading market for electric-powered transportation

With the help of the National Electric-Powered Vehicle Development Plan, the German federal government aims to have at least one million electric and plug-in hybrid vehicles, which can be recharged by connecting them to an external electric power source, on German roads by 2020 at the latest. Within the scope of the second economic recovery package, the German government has set aside a total of 500 million euros for various projects to be carried out from 2009 to 2011 alone. The German Federal Ministry of Transport and the Federal Ministry of Economics and Technology have founded a joint Electric Vehicle Branch with the remit of ensuring that Germany achieves its goal of positioning itself as the leading market for electric vehicles.12 One of the Ministry's main investment focuses will be on the electric vehicles sector.13 2015 2020 4%

// 12 Federal Government: "Moving Toward the Future with New Technologies" – January 21, 2010 // 13 Federal Government: "Greater Mobility and an Improved Infrastructure in Germany" – January 22, 2010

U.S. XEV PENETRATION BY TYPE (2015 AND 2020)

Source: Deutsche Bank, Electric Vehicles: Plugged In 2, November 2009

Studies conducted by Deutsche Bank and HSBC forecast worldwide sales of over four million fully electric cars by 2020. Meanwhile, the market for hybrid vehicles, as a first step by automobile manufacturers on the road to an electric future, will grow significantly faster – with forecasts predicting a volume of 13 million units by 2020.

Thus, the use of electric vehicles will increase not only due to environmental and climaterelated considerations but also for economic reasons. For Manz, this entails significant market potential. The likely current outlook is that the market volume of the equipment sector will total several hundred million euros over the next five years, and Manz aims to gain a share of this market running well into double digits. Furthermore, high-performance batteries have many storage medium applications in spheres outside the automobile industry. In the future, they will also be used in fields such as shipping, aerospace, commercial vehicles, as well as for a range of industrial and private applications. For example, the technology has applications in motorboats, avionics, satellites, agriculture, and in decentralized photovoltaic plants, particularly in countries with no nationwide power grid.

To sum up, our company views the lithium-ion battery segment as a highly attractive growth area, which Manz can participate in over the medium term thanks to our extensive research and development expertise.

Studies forecast particularly strong growth for the hybrid vehicles market

Efficiency of electrotechnology clearly superior to that of combustion motors

Employees //

Manz Academy established as an employee training center

As of March 31, 2010, Manz employed a total workforce of 1,476 (2009: 1,418) both in Germany and abroad, 385 employees of which worked at our company headquarters in Reutlingen.

In terms of employee numbers, the largest Manz Group subsidiary is Intech Machines Co., Ltd., Taiwan, with 607 employees, followed by Manz Automation Slovakia s.r.o with 209 employees and Manz Tübingen GmbH with 120.

Our strategic decision to make sustained long-term investments in research & development has proven a great success for Manz Automation. The rapid rise in new business during this early market recovery phase can be put down to the innovative technologies and products offered by Manz, most of which have been developed and put on the market during the past few months. Looking ahead, Manz will be striving to maintain its technological leadership, meaning that our R&D activities will remain at the same levels as in 2009. Our R&D efforts will concentrate both on improving the wet-chemical process and integrated production lines and on developing our vacuum coating technology into a further core area of Manz expertise.

The development of vacuum coating systems for crystalline solar cells and thin-film solar modules represents a major milestone in the company's progress. As a result, the future percentage of machines developed and produced by the Manz Group for both technologies will rise to over 90%. This will facilitate the wide-ranging integration of individual machines and processes, while also creating considerable potential for further cost cuts and efficiency increases, thus enabling the Manz Group to establish itself on the market as a supplier of integrated systems for the production of crystalline solar cells and thin-film solar modules.

The first ultra-modern machines should be ready for their market launch, after a rapid development period, as early as 2011. This will represent a decisive step towards positioning Manz Automation as a provider of technology and process machines, but will, above all, strengthen the long-term future viability of the Group as a whole. Not only will this complement our overall product portfolio, it will also put in place a broader technological base upon which to achieve future efficiency increases in products across all Group divisions.

Our activities in the field of lithium-ion batteries comprise another research sphere. To this end, Manz has entered into an innovation alliance with a view to developing machines for the industrial production of batteries. The goal of this research project is to explore new manufacturing technologies and to apply them to the demands of mass production. Manz Automation will contribute its expertise to a series of yet-to-be-developed production stages, while also taking responsibility for the production automation systems.

During the first three months of 2010, Manz Automation AG registered a ratio of research costs to sales of 14.8% (previous year: 11.7%). If we only consider capitalized development costs, the ratio of research costs to sales totals 7.2%.

Earnings Position //

The company's profit and loss statement is organized according to the total cost method.

During the first three months of 2010, revenues rose from 16.5 million euros in the previous year to 21.3 million euros, representing growth of 29.4% as compared with Q1 2009. However, this only partially reflects the positive trend in orders since the start of the year. The first quarter started sluggishly, meaning that capacity utilization could only be stepped up gradually. The growth achieved was chiefly down to the FPD segment and the PCB industry (other industry), which both respectively benefited from particularly strong demand from our Asian customers.

Compared to the same period last year, the revenue trend from the different segments is only partially comparable and is set to change in future on a pro-rated basis. Thanks to the early recovery of the printed circuit board industry, the Manz Group registered the largest proportion of overall revenues in the Other segment during the first three months of 2010, with 8.6 million euros or 40.1% (2009: 4.6 million euros). Products from Manz Intech Machines Co., Ltd. in Taiwan were responsible for the lion's share of revenues in this division, among them wet chemical processing equipment for the PCB industry. In contrast, the Solar segment, hitherto the strongest revenue driver, registered 31.9% of the Manz Group's overall revenues, at 6.8 million euros as compared with 8.2 million euros in Q1 2009. The FPD segment registered growth of some 48%, representing 24.3% of revenues or 5.2 million euros, as against 3.5 million euros in Q1 2009. In the new segment New Business, which chiefly comprises our involvement in the lithium-ion batteries sector, the Group achieved some 3.7% of overall revenues or 0.8 million euros (2009: 0.1 million euros).

Broken down according to regions, Manz Automation registered the following worldwide revenues: In Germany, the company generated revenues of 2.8 million euros as against 5.2 million euros the previous year (12.8% of total revenues). In the rest of Europe, Manz generated 2.5 million euros or 11.7% of total revenues, as against 2.8 million euros the previous year. At 70.9%, Manz generated the largest share of revenues in Asia. This represents revenues of 15.1 million euros as compared with 8.2 million euros during Q1 2009. In the USA, revenues of approximately 0.8 million euros were achieved (2009: 0.3 million euros). In all other regions, Manz generated revenues of approximately 143,000 euros (2009: 0 euros).

Taking together changes to our inventory of finished goods and internally produced and capitalized assets in the wake of increased R&D investments, Manz Automation AG's total operating revenues increased to 34.3 million euros. This represents growth of 60.9% as compared with Q1 2009 (21.3 million euros). This percentage increase, significantly higher than that registered by the revenues, is an early reflection of the improvement in our order situation.

Due to the improvement in new orders, the cost of materials soared from 9.9 million euros to 20.7 million euros, and the cost of materials ratio also rose sharply to 60.2% (2009: 46.6%). This is chiefly due to storage projects already commenced but which (following the percentage of cost method) could not be booked as revenue during the first quarter. Accordingly, our gross profit rose from 12.9 million euros to 15.0 million euros during the reporting period. This figure also includes other operating income of 1.4 million euros (2009: 1.5 million euros), which is chiefly down to the release of write-downs on accounts receivable.

At the end of the reporting period (March 31, 2010), Manz had a total of 1,476 employees. The expansion of the research and development division and vacuum coating technology recruitment entailed the appointment of various highly qualified specialists, leading to a rise in personnel costs from 10.2 million euros during Q1 2009 to 11.0 million euros this year. However, increasing revenues meant that the personnel costs ratio fell from 47.7 % to 32,0 %.

During the first three months of the year, we undertook write-downs totaling 1.7 million, exactly the same as during Q1 2009. This figure primarily contains write-downs on fixed assets and on internally produced and capitalized assets. Other operating expenses comprise marketing and sales costs and, in particular, logistics, administration, and consulting costs. Other operating expenses thus totaled 5.6 million euros (2009: 6.0 million euros).

Due to the present cost structure, continuing overcapacity, and the weak start to the first quarter, earnings before interest and taxes (EBIT) remained negative at –3.3 million euros (2009: –5.0 million euros).

Taking a look at the individual segments, Solar registered EBIT of –2.9 million euros, as compared with –2.6 million euros in Q1 2009. In the FPD segment, EBIT rose to 89,000 euros (2009: –2.1 million euros). The operating result in the New Business segment was –0.3 million euros, as against 13,000 euros in Q1 2009. The Other segment posted EBIT of –0.3 million euros, much the same as in Q1 2009.

Interest-bearing financial liabilities, some of them non-current, are held by our subsidiaries. However, this interest expenditure is offset by interest earnings and current investments. During the reporting period, income from financial assets totaled 106 thousand euros. Earnings before tax (EBT) thus improved to –3.2 million euros from –4.9 million euros in Q1 2009.

After taxes and minority shares, the Group's earnings for the period totaled –2.8 million euros. Based on an average of 4,480,054 shares outstanding, this corresponds to earnings per share of –0.62 euros (2009: –0.96 euros per share).

As of the reporting date, total assets had decreased slightly during the first three months of 2010. On March 31, 2010, they amounted to 225.2 million euros, as compared with 226.7 million euros on December 31, 2009. Despite the quarterly loss, balance sheet shareholders' equity rose slightly due to currency profits from 179.0 million euros to 179.8 million euros – primarily resulting from the profit arising from currency conversion through goodwill from Manz Intech Machines, Taiwan. The equity ratio on the reporting date was thus 79.9%, as compared with 79.0% on December 31, 2009.

At 11.9 million euros, non-current liabilities at the end of the reporting period were very slightly up on the figure for the end of 2009 (11.8 million euros). This was due to a slight increase in pension provisions at Manz Automation Tübingen GmbH plus other long-term provisions. In contrast, deferred taxes fell slightly, from 4.5 million euros on December 31, 2009, to 4.3 million euros.

At the end of the first quarter, current liabilities totaled 33.5 million euros, also down slightly compared with the figure of 35.9 million euros on December 31, 2009. This was primarily due to a decrease in accounts payable from 14.2 million euros to 19.1 million euros, which can be attributed to the positive course of continuing business operations. Meanwhile, current financial liabilities fell significantly from 8.7 million euros to 3.6 million euros, chiefly due to the clearing of current account liabilities. Other liabilities also fell, from 8.4 million euros to 5.8 million euros, mainly due to the settlement of VAT liabilities.

On the asset side, non-current fixed assets increased from 66.7 million euros to 69.5 million euros. In the wake of intensive research and development activities, the intangible assets also increased from 47.0 million euros to 48.8 million euros, while investments in property, plant, and equipment led to a rise in this item from 16.6 million euros on December 31, 2009, to 17.1 million euros. Meanwhile, due to the quarterly loss, active deferred taxes rose from 2.5 million euros to 2.9 million euros.

Current assets declined from 160.0 million euros at the end of the 2009 to 155.7 million euros, while inventories increased from 29.8 million euros the previous year to 37.4 million euros, primarily as a result of the manufacture of semi-finished goods. On the back of rebounding operations during the first quarter of 2010, trade receivables rose from 39.6 million euros to 40.9 million euros, with a corresponding reduction in liquid assets, in order to finance the working capital, from 59.3 million euros to 41.9 million euros.

Liquidity Position //

During the first quarter, Manz Automation AG generated cash flow in the narrower sense (annual net income plus write-downs on fixed assets as well as an increase/decrease in long-term pension provisions) of –0.8 million euros. This represents an increase of 2.3 million euros from the figure of –3.1 million euros registered the previous year. Taking changes to working capital into account, the company generated an operating cash flow of –8.0 million euros, a fall of 13.3 million euros as compared with Q1 2009 . This was due to the increased working capital needed in order to process the recent new orders.

The cash flow from investment activities was –4.7 million euros, as compared with –1.6 million euros the previous year. This figure arises chiefly from the acquisition of short-term securities investments. These primarily comprise cash investments with a holding period of more than three months, mostly relating to secure investments in money market funds.

Cash flow from financing activities at the end of the reporting period totaled –5.1 million euros, down from 63 thousand euros in Q1 2009. This is primarily due to the repayment of overdraft loans.

Events After the Balance Sheet Date

No events which could have had a significant impact on our financial situation took place after the reporting date.

Risk Analysis and Forecast

There have been no significant changes to the opportunities and risks presented in the 2009 Annual Report.

Outlook //

During the first quarter, we succeeded in gaining a large number of new orders. Both the solar and the flat panel display (FPD) markets have rebounded, as a result of which our capacity is once again almost fully utilized. In our view, the Asian market – with China very much to the fore – offers the best growth prospects over the coming months. Indeed, we are expecting a long-term recovery in Asia, as our customers have already put in place investment plans extending beyond the end of 2010. In the sphere of thin-film technology, experts do not expect an upturn until the second half of the year at the earliest. Despite this and at the beginning of the second quarter, we have managed to acquire some initial small orders in the thin-film segment and expect this trend to strengthen.

Our R&D strategy has given us an excellent foundation on which to build. Currently, we are not just tapping into an attractive growth market in the solar segment, but we are also steadily gaining market share. There is particularly encouraging demand for new developments such as high-precision printers, selective emitters to increase the efficiency of solar cells, and integrated back-end solutions. In future, we will also continue to pay particularly close attention to products that can help our customers to cope with ever-growing cost pressure, which is why we will, for instance, be pushing ahead with special solutions for the CIS/CIGS segment in connection with our new developments for the thin-film sector. We are convinced that this technology offers the greatest efficiency-boosting potential, making it win through in the long term as a highly efficient solution.

Another important project for us is the establishment of our new subsidiary, Manz Coating. Here, too, progress to date has been encouraging, and we are aiming to present a silicon nitride coating plant by mid-2011 – at the 26th EU PVSEC in Hamburg. This would put the Manz Group in a position to offer a fully integrated production line in the crystalline field, a milestone that will represent a further key step towards positioning Manz Automation as a provider of technology and process machines. Most importantly of all, this will strengthen the long-term future viability of the Group as a whole. Not only will this complement our overall product portfolio, it will also put in place a broader technological base upon which to achieve future efficiency increases in products across all Group divisions.

Due to the improvement in business operations, we are anticipating revenue growth for 2010 of at least 50% from the 2009 figure (total 2009 revenues: 85.9 million euros). In the event of favorable market trends going forward, particularly in the thin-film technology segment, there is even the potential to exceed this goal.

All in all, we are very confident that the activities and projects launched by us will take effect in the near future and restore Manz Automation to growth. Our aim is to drive the industry forward through new and innovative products, thus making a major contribution, as high-tech mechanical engineers, to shaping the future we live in, while simultaneously profiting from these exciting developments. That is why we are happy to reaffirm our forecast from March 2010 that we will achieve a positive EBIT for the year as a whole.

The Managing Board

Made by Manz // Quarterly Report through Q1 2010 Consolidated Interim Financial StatementS & Notes

Consolidated Interim Financial StatementS & Notes

Consolidated Interim Financial StatementS

035	Consolidated Statement of Income
036	Statement of Overall Income for the Period
037	Consolidated Balance Sheet
038	Consolidated Cash Flow Statement
039	Statement of Changes in Consolidated Equity
040	Segment Reporting for Divisions
040	Segment Reporting for Regions

Notes TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

041	Basic Principles
042	Basis of Consolidation
043 K	ey Events in the Period Under Review
043	Notes to the Individual Items on the Income Statement
044	Notes to the Individual Items on the Consolidated Balance Sheet
046	Key Events of Particular Importance Occuring after the End of the Reporting Period
047	Further Information

Consolidated Interim Financial StatementS & Notes

Consolidated Interim Financial StatementS

Consolidated Statement of Income

	Jan. 1 to Mar. 31, 2010 EUR tsd	Jan. 1 to Mar. 31, 2009 EUR tsd
Revenues	21,334	16,487
Changes in inventory	11,419	4,053
Internally produced and capitalized assets	1,538	761
Total operating revenues	34,291	21,301
Other operating income	1,357	1,533
Material expenditure	–20,659	–9,932
Gross profit/loss	14,989	12,902
Personnel expenses	–10,984	–10,159
Write-downs	–1,693	–1,722
Other operating expenses	–5,626	–5,984
Earnings before interest and taxes [EBIT]	–3,314	–4,963
Result from equity-accounted financial investments	–19	–5
Financial income	190	307
Financial expenses	–65	–206
Earnings before taxes [EBT]	–3,208	–4,867
Taxes on income	489	182
Consolidated net result	–2,719	–4,685
Portion of earnings from minority interests	54	–403
Portion of earnings from shareholders
Manz Automation AG	–2,773	–4,282
Weighted average number of shares	4,480,054	4,477,554
Earnings per share
Earnings per share (diluted = undiluted) in EUR per share	–0.62	–0.96

Statement of Overall Income for the Period

	Jan. 1 to Mar. 31, 2010 EUR tsd	Jan. 1 to Mar. 31, 2009 EUR tsd
Net income	–2,719	–4,685
Other comprehensive income
Difference as a result of currency conversion	3,395	8
Changes to the fair value of securities	32	–247
Changes to the fair value of cash flow hedges	0	–1,923
Changes to the valuation of share-based compensation	66	30
Tax effects from other comprehensive income	–6	552
Other comprehensive income	3,487	–1,580
Overall income after taxes	768	–6,265
Attributed to minority interests	44	–164
Attributed to Manz Automation AG shareholders	724	-6,101

Consolidated Balance Sheet in EUR tsd

	Mar. 31, 2010	Dec. 31, 2009
Assets
Non-current assets	69,514	66,698
Intangible assets	48,801	47,012
Tangible assets	17,129	16,608
Equity-accounted financial investments	282	301
Deferred taxes	2,885	2,461
Other non-current assets	417	316
Current assets	155,646	160,012
Inventories	37,402	29,819
Accounts receivable	40,892	39,566
Income tax receivables	612	524
Other current receivables	3,426	1,934
Securities	31,403	28,838
Liquid assets	41,911	59,331
Total assets	225,160	226,710
Equity & Liabilities
Equity	179,798	179,030
Share capital	4,480	4,480
Capital reserves	144,292	144,226
Revenue reserves	23,750	26,497
Currency conversion	5,406	2,001
Manz Automation AG shareholders	177,928	177,204
Minority interests	1,870	1,826
Non-current liabilities	11,870	11,818
Non-current financial liabilities	692	666
Non-current deferred investment subsidies	431	248
Financial liabilities from leases	9	24
Pension provisions	3,856	3,825
Other non-current provisions	2,636	2,534
Deferred taxes	4,246	4,521
Current liabilities	33,492	35,862
Current financial liabilities	3,594	8,686
Accounts payable	19,125	14,222
Advance payments received	838	1,045
Income tax liabilities	531	474
Other current provisions	3,596	3,055
Other liabilities	5,805	8,367
Financial liabilities from leases	3	13
Total equity & liabilities	225,160	226,710

Consolidated Cash Flow Statement in EUR tsd

	Jan. 1 to Mar. 31, 2010	Jan. 1 to Mar. 31, 2009
Cash flow from operations
Annual profit or loss	–2,719	–4,684
Amortization/depreciation of non-current assets	1,693	1,722
Loss (+) / Profit (−) from at equity-accounted investments	19	5
Increase (+) / Decrease (−) in pension provisions and other non-current provisions	133	–135
Other non-cash income (–) and expenses (+)	66	30
Cashflow	–808	–3,062
Gains (+) / losses (–) from disposals of assets	0	–8
Increase (+) / Decrease (–) in inventories, accounts receivable, and other assets	–13,325	13,327
Increase (+) / Decrease (−) in pension provisions and other liabilities	6,107	–5,005
Cash flow from operations	–8,026	5,252
Cash flow from investments
Incoming payments from the sale of non-current assets	0	11
Payments for investments in intangible assets and property, plant, and equipment	–2,148	–1,863
Incoming payments from the sale of securities	5,000	4,322
Payments for the purchase of securities	–7,565	–4,071
Cash flow from investments	–4,713	–1,601
Cash flow from financing activities
Payments toward the repayment of finance lease agreements	–10	–2
Payments toward the repayment of non-current loans	–34	–869
Change in overdraft loans	–5,092	934
Cash flow from financing activities	–5,136	63
Cash and cash equivalents at the end of the period
Cash change in cash and cash equivalents [ subtotal 1– 3 ]	–17,875	3,714
Net change in cash and cash equivalents due to currency conversion	455	120
Cash and cash equivalents on January 1	59,331	33,938
Cash and cash equivalents on December 31	41,911	37,772
Composition of cash and cash equivalents
Liquid assets	41,911	37,772
Cash and cash equivalents on December 31	41,911	37,772

Statement of Changes in Consoli date d Equit y for the Interim Financial Statements as OF March 31, 2010 in EUR tsd
	Subscribed capital	reserves Capital	Own shares	Revenue reserves			conversion Currency	Automation AG Shareholders in Manz	Minority shares	equity Total
				Accumulated profits	Market valuation securities	Cash flow hedges
As of January 1, 2009	4,480	144,122	–203	33,483	–2,650	1,801	614	181,647	9,581	191,228
Overall income		30		–4,282	–235	–1,383	–231	–6,101	–164	–6,265
As of March 31, 2009	4,480	144,152	–203	29,201	–2,885	418	383	175,546	9,417	184,963
As of January 1, 2010	4,480	144,226	0	26,397	100	0	2,001	177,204	1,826	179,030
Overall income		66		-2,773	26	0	3,405	724	44	768
As of March 31, 2010	4,480	144,292	0	23,624	126	0	5,406	177,928	1,870	179,798

Segment reporting	for divisions as of March 31, 2010 in EUR tsd
	Solar			FPD		New Business		Others		Central func tions/ other		Consolidation		Group
				Q1/2010 Q1/2009 Q1/2010 Q1/2009 Q1/2010 Q1/2009 Q1/2010 Q1/2009 Q1/2010 Q1/2009 Q1/2010 Q1/2009 Q1/2010 Q1/2009
Revenues with third parties	6,819	8,216	5,192	3,516	767	111	8,556	4,644	0	0			21,334	16,487
Revenues with other segments							3,824	4,126			–3,824	–4,126
EBIT	–2,852	–2,626	89	–2,088	–260	13	–291	–262					–3,314	–4,963
Segment assets		60,426 129,087	51,061	49,227	4,845	969	19,861	19,388	88,967	55,967				225,160 254,638
Segment liabilities	9,460	10,387	13,788	10,773	1,080	116	3,477	3,731	17,557	44,668			45,362	69,675
Net assets		50,966 118,700	37,273	38,454	3,765	853	16,384	15,667	71,410	11,299				179,798 184,963
Additions to assets	1,302	1,388	220	97	58	20	240	62	328	296			2,148	1,863
Amortization/ depreciation	581	813	298	284	25	0	441	390	348	235			1,693	1,722
Non-cash
expenses (–) / income (+)	114	0	943	1,426	0	0		0	0	30			1,057	1,456
Employees (annual average)	304	272	297	307	20	8	493	526	264	326			1,378	1,439

Segment reporting for regions as of March 31, 2010 in EUR tsd
	Germany		Rest of Europe		Asia		America		Regions Other		Group
										Q1/2010 Q1/2009 Q1/2010 Q1/2009 Q1/2010 Q1/2009 Q1/2010 Q1/2009 Q1/2010 Q1/2009 Q1/2010 Q1/2009
Third-party revenues by customer location	2,749	5,225	2,501	2,787	15,118	8,200	823	275	143	0	21,334	16,487
Non-current assets (without deferred taxes)	23,168	16,571	7,821	7,796	35,264	34,706	94	120	282	313	66,629	59,506

I. Basic principles //

These consolidated interim financial statements dated March 31, 2010, were prepared according to the International Financial Reporting Standards (IFRS) laid down by the International Accounting Board (IASB), as approved for use in Europe by the EU. It has been neither officially audited nor subjected to an auditor's review.

There were no changes to the accounting and valuation methods as compared with the annual financial statements dated December 31, 2009. A detailed description of these methods was published in the Notes to the 2009 Consolidated Financial Statements.

The consolidated interim financial statements were prepared in euros. Unless otherwise stated, all amounts are shown in thousands of euros.

II. Basis of consolidation //

Manz Automation AG's consolidated financial statements include all the companies for which Manz AG can either directly or indirectly determine the financial and operational policy ("controlling relationship"). Alongside Manz Automation AG, the group of consolidated companies includes the following subsidiaries:

Fully Consolidated Companies Interest in %

Manz Automation Tübingen GmbH	Tübingen/Germany	100.0%
Helmut Majer Verwaltungsgesellschaft mbH i.L.	Tübingen/Germany	100.0%
Manz Coating GmbH (previously: Manz Dünnschichttechnologie GmbH)	Reutlingen/Germany	100.0%
Manz Automation Inc.	North Kingstown/USA	100.0%
Manz Automation Hungary Kft.	Debrecen/Hungary	100.0%
MVG Hungary Kft.	Debrecen/Hungary	100.0%
Manz Automation Slovakia s.r.o.	Nove Mesto nad Vahom/Slovakia	90.0%
Manz Automation Spain S.L.	Madrid/Spain	100.0%
Manz Automation Asia Ltd.	Hong-Kong	100.0%
Manz Automation Taiwan Ltd. (2)	Hsinchu/Taiwan	100.0%
Manz Automation (Shanghai) Co., Ltd. (2)	Shanghai/China	100.0%
Manz Automation India Private Limited (2)	New-Delhi, India	75.0%
Manz Intech Machines Co. Ltd. (2)	Chungli/Taiwan	95.5%
Intech Enterprises [B.V.I.] Co. Ltd. (3)	Road Town/British Virgin Islands	95.5%
Intech Machines [B.V.I.] Co. Ltd. (3)	Road Town/British Virgin Islands	95.5%
Intech Machines (Suzhou) Co. Ltd. (4)	Suzhou/China	95.5%
Intech Technical (Shenzhen) Co. Ltd (4)	Shenzhen/China	95.5%
Consoli date d at Equit y

Axystems Ltd. Petach-Tikva/Israel 24.0%

(1) via Manz Automation Hungary Kft.

(2) via Manz Automation Asia Ltd.

(3) via Manz Intech Machines Co. Ltd.

(4) via Intech Machines [B.V.I.] Co. Ltd.

III. Key events in the period under review //

During the first three months of 2010, the Manz Group's revenues rose by 29.4% from 16.5 million euros in Q1 2009 to 21.3 million euros, while total operating revenues increased by 61% to 34.3 million euros.

Earnings before interest and taxes [EBIT] improved from –5.0 million euros in Q1 2009 to –3.3 million euros.

IV. Notes to the individual items on the income statement //

Other operating income

	Mar. 31, 2010 EUR tsd	Mar. 31, 2009 EUR tsd
Capital gains	213	981
Income from the release of provisions	114	0
Income from the sale of investments	0	8
Subsidies	7	169
Changes to write-downs on accounts receivable	962	258
Other	61	117
	1,357	1,533

Material expenditure

	Mar. 31, 2010 EUR tsd	Mar. 31, 2009 EUR tsd
Cost of raw materials, supplies, and purchased goods	19,655	8,903
Expenditure on third-party services	1,004	1,029
	20,659	9,932

Other operating expenses

	Mar. 31, 2010 EUR tsd	Mar. 31, 2009 EUR tsd
Rent and leasing	1,201	850
Advertising and travel expenses	763	769
Outgoing freight, packaging	158	319
Legal and consultancy costs	312	193
Insurance	209	218
Capital losses	217	400
Changes to write-downs on accounts receivable	19	1,426
Other	2,747	1,809
	5,626	5,984

Taxes on income

Income taxes include both actual and deferred income taxes arising from temporary differences and existing tax loss carryforwards.

Income taxes are composed of the following items:

	Mar. 31, 2010 EUR tsd	Mar. 31, 2009 EUR tsd
Current tax liabilities	138	179
Deferred tax liabilities/income (–)	–627	–361
	–489	–182

V. Notes to the individual items on the consolidated balance sheet //

Intangible assets

	Licenses, software and similar rights, and assets EUR tsd	Capitalized development costs EUR tsd	Goodwill EUR tsd	Advance payments EUR tsd	Total EUR tsd
As at December 31, 2009	14,283	10,473	21,933	323	47,012
As at March 31, 2010	13,818	11,495	23,165	323	48,801

The increase in goodwill from 21,933,000 euros to 23,165,000 is exclusively attributable to foreign currency effects.

Tangible assets

EUR tsd EUR tsd EUR tsd EUR tsd EUR tsd As at December 31, 2009 8,277 4,114 4,062 155 16,608		Property and buildings including buildings on third-party properties	Technical equipment and machinery	Other equipment, furniture, and office equipment	Advance payments	Total
	As at March 31, 2010	8,836	4,046	3,965	282	17,129

Inventories

	Mar. 31, 2010	Dec. 31, 2009
	EUR tsd	EUR tsd
Raw materials and supplies	12,413	12,570
Goods in process, work in progress	22,211	15,776
Finished goods, products	1,692	879
Advance payments	1,086	594
	37,402	29,819

Accounts receivable

	Mar. 31, 2010 EUR tsd	Dec. 31, 2009 EUR tsd
Future receivables from non-current construction contracts	15,279	13,469
Accounts receivable	25,613	26,097
	40,892	39,566

Future receivables from non-current construction orders, accounted for according to their percentage of completion, are determined as follows:

	Mar. 31, 2010 EUR tsd	Dec. 31, 2009 EUR tsd
Manufacturing costs including outcome of the contract for non-current construction contracts	28,312	32,921
minus advance payments received	-13,033	-19,452
	15,279	13,469

Other current receivables

	Mar. 31, 2010 EUR tsd	Dec. 31, 2009 EUR tsd
Tax receivables (not income taxes)	633	321
Receivables, personnel	164	75
Accrued interest	49	180
Other accruals and deferrals (primarily from insurance)	121	566
Other	2,459	792
	3,426	1,934

Equity

Changes to the Group's individual equity items are detailed separately in the Consolidated Statement of Changes to Equity.

Share capital _ Share capital totals 4,480,054 euros (December 31, 2009: 4,480,054 euros), divided into 4,480,054 registered, common, no-par shares. The face value of a no-par share is 1.00 euro.

There were no changes in share capital during the first quarter of 2010.

Capital reserves _ The capital reserves chiefly comprise payments by shareholders in accordance with Article 272, paragraph 2, sentence 1, of the German Commercial Code (Handelsgesetzbuch – HGB) less the costs of capital procurement after taxes.

The increase in the first quarter of 2010 totaling 66,000 euros pertains to the allocation of funds from share-based compensation (Manz Performance Share Plan).

VI. Key events of particular importance occuring after the end of the reporting period //

No further events occured after the reporting date that could have an impact on the company's financial position and results of operations.

VII. Further Information //

Personnel

As of March 31, 2010, the Manz Group employed an average of 1,378 persons (March 31, 2009: 1,446 persons).

Managing Board

Dieter Manz, Dipl. Ing. (FH), CEO Martin Hipp, Dipl.-Kaufmann, CFO Volker Renz, Dipl. Ing. (FH), COO

Supervisory Board

Prof. Dr. Heiko Aurenz, Dipl. oec. (Chairman), Partner at Ebner Stolz, Mönning Bachem Unternehmensberatung GmbH, Stuttgart

Dr. Guido Quass, lawyer and business administration graduate (deputy chairman), Partner of Menold Bezler Rechtsanwälte Partnerschaft (= Menold Bezler Lawyers Partnership), Stuttgart (since March 24, 2010)

Prof. Dr.-Ing. Dr. h.c. mult. Rolf D. Schraft

Reutlingen, May 7, 2010

The Managing Board of Manz Automation AG

Dieter Manz Martin Hipp Volker Renz

Chief Executive Officer

Manz Automation AG Steigäckerstraße 5 D-72768 Reutlingen Phone +49 (0) 7121 9000-0 Fax +49 (0) 7121 9000-99 info@manz-automation.com