MBB SE — Interim / Quarterly Report 2008

Aug 29, 2008

Half-Year Financial Report 2008

MBB Industries AG . Berlin

Half-Year Financial Report 2008 MBB Industries AG

MBB Industries in Numbers

First Half-Year (January 01-June 30) (unaudited)	2006 HGB	2007 IFRS	2008 IFRS	∆ 2007 / 2008
Performance (figures)	€k	€k	€k	%
Sales revenue	23,001	41,651	94,118	126.0
Operating output	26,933	45,444	97,440	114.4
Material expenses	9,568	-20,299	-53,673	164.4
Personnel expenses	6,510	-9,907	-23,025	132.4
EBITDA	3,654	6,291	9,545	51.7
EBITDA-Margin	15.9 %	15.1 %	10.1 %	-32.9
EBIT	2,317	4,230	6,934	63.9
EBIT-Margin	10.1 %	10.2 %	7.4 %	-27.5
EBT	1,772	3,509	6,157	75.5
EBT-Margin	7.7 %	8.4 %	6.5 %	-22.4
Consolidated net profit after minorities	1,692	3,099	4,637	49.7
Numbers of shares	6,600,000	6,600,000	6,600,00	0.0
eps in €	0.26	0.47	0.70	49.7
Balance sheet figures	€k	€k	€k	%
Non-current assets	38,886	43,658	59,168	35.5
Current assets	34,177	38,701	79,694	105.9
Thereof cash and cash equivalents	13,747	12,493	18,389	47.2
Subscribed capital	6,600	6,600	6,600	0.0
Other equity	25,766	32,794	49,513	51.0
Equity total	32,366	39,394	56,113	42.4
Capital ratio	44.3 %	47.8 %	40.4 %	-15.5
Non-current liabilities and provisions	17,686	18,509	27,808	50.2
Current liabilities and provisions	23.011	24.456	54.939	124,6
Balance sheet total	73,063	82,359	138,862	68.6
Net financial dept	8,625	7,333	9,057	23.5
Employees (Key Date)
Technical Applications	1,049	1,017	1,527	50.1
Industrial Production	259	240	245	2.1
Trading & Services	15	12	92	650.0
Total	1,323	1,269	1,864	46.9

Message from the Managing Board

Dear Shareholders,

Growth in turnover and income at MBB Industries AG continued into the first six months of 2008. Turnover underwent a considerable increase to €94m while earnings per share rose to 70 cents.

Only two years after the company's floatation and listing in the Entry Standard, MBB changed over to the German Stock Market's Prime Standard segment on June 20, 2008. At the same time, this year's dividend rose in line with company growth to 25 cents. The change in segment and increase in the dividend payout both serve to strengthen our faith in our development as a public listed company. Our increased transparency, positive business development, and access to the international community of investors give us an ideal framework within which we can continue to develop our successful business activities.

On June 26, 2008, DTS Systeme GmbH was integrated into the MBB Group. This company, in which we have an 80% stake, is a leading regional provider of IT infrastructure services, and its 75 employees generate a profitable annual turnover of €19m. The company displays considerable potential for value growth.

Shortly after the end of the reporting period, Reimelt Henschel received one of the largest orders in the history of the group. The order for the construction of a large-scale food processing plant in Russia has a volume of more than €15m. In addition to this milestone of organic growth, Reimelt Henschel successfully implemented a strategic expansion of its product range by acquiring the business operations of Wilhelm Guth Engineering GmbH & Co. KG (in an asset deal) on August 26. Guth Engineering is a leading constructor of processing plants for liquid raw materials and generates a profitable turnover of €10m per year.

Our view is that the current crisis in the financial markets is likely to persist, even though we are unable to predict the pattern of its onward development. Nonetheless the conditions for continued value growth at MBB remain good. We see the half-year results as a positive endorsement of our forecast for the year 2008: over €190m in turnover with earnings per share of €1.65. The positive expectations for our company's turnover, earnings, and capital and cash resources are also set to continue beyond the end of the current year.

Although our share price has developed better than the indices in the first half-year, it does not reflect the quality of our business development. In our opinion, further positive share price development potential exists.

MBB Industries AG is a medium-sized holding company which, together with its portfolio companies, forms the MBB Group.

General and Business Conditions

The year 2008 is at the mercy of the developments in the financial and commodities markets. The problems in the sub-prime sector of the banking industry combined with increasing energy and commodity prices will continue to affect economic development in our markets, and in turn, that of our holdings, for the rest of the year. This may have the effect that the positive developments in the current MBB portfolio are somewhat slow in comparison to previous years. However, at the same time, conditions for the purchasing of holding companies are improving, since the number of businesses available for sale is rising while their asking prices are falling. MBB's equity capital resources and cash position give it good chances of further growth through acquisition.

Earnings, Assets, and Financial Situation

MBB has generated increases in both turnover and earnings as a result of organic growth and through acquisitions. The finance and asset situation has continued to improve from the solid base of the last business year of 2007. Acquisitions and investments in the first half-year were covered by operative cash flow.

The consolidated half-yearly statement for June 30, 2008 was the first to be compiled in accordance with the International Financial Reporting Standards (IFRS). However, the figures for the previous year were also converted to comply with the IFRS.

The MBB Group has increased consolidated turnover for the first half of the year by 126% to €94.1m compared with the previous half-year 2007 (€41.7m). Operating output for the same period increased from €45.4m in 2007 to €97.4m in 2008, an increase of 114.4%. The other operative earnings of €3.5m stem from machine sales, insurance paybacks, and the release of unused provisions. The reversal of credit difference from acquisition accounting stems from the established final purchase price for the Reimelt Henschel group, which was acquired in 2007.

Material costs increased considerably relative to turnover from 48.7% to 57.0%. This was triggered by the changes to the group's real net output ratio resulting from the takeover of the Reimelt-Henschel group, which was not yet part of the MBB Group for the equivalent period of the previous year. Accordingly, the ratio of personnel expenses

to turnover fell slightly from 23.8% in 2007 to 24.5%. Furthermore, the increase in the price of energy and raw materials also had an impact on the increased material ratio.

The EBITDA (earnings before interest, tax, depreciation and amortisation) attained a level of €9.5m (compared to €6.3m in the previous half-year), representing an increase compared to the equivalent period in the previous year. At the same time, the EBITDA margin fell from 15.1% to 10.1%. Again, this is due to the initial inclusion of Reimelt Henschel, whose EBITDA margin of approx. 5% is lower than the remainder of the company portfolio. Moreover, the EBITDA for the first half of 2008 mainly contains operative sums from ongoing business while for 2007, sales of companies were also registered. The EBIT (earnings before interest and tax) of the MBB Group reached €6.9m for the half-year just ended (€4.2m in the previous half-year), representing an increase of 63.9%. Taking into account the financial result of minus €0.8m, EBT (earnings before tax) is at €6.2m (€3.5m in the previous half-year). This puts it at 6.5% of sales revenue (8.4% in the previous half-year) or 75.5% more than the previous half-year.

Consolidated profit for the year after third party profit share in incorporated companies rose by 49.7% to €4.6m from €3.1m the previous half-year. In the consolidated accounts on 30.06.2008, this represents a contribution to equity capital of €56.1m (€50.5m on December 31, 2007). Oriented to the total consolidated accounts of €138.9, the MBB Group has a capital ratio of 40.4% (38.3% on December 31, 2007).

On June 30, 2008, the MBB Group disposed of financial liabilities of €27.4m (€26.2m on December 31, 2007) and cash equivalents and short-term securities of €18.4m (€26.9m on December 31, 2007). Accordingly, net financial liabilities for the MBB Group were €9m, representing a rise since the end of the year 2007. This is due to the timing and seasonality of the rise in claims compared with December 31, 2007, and the takeover of DTS.

Development of the Segment

For MBB to undergo further growth requires a change to its organisational structures and in turn a modification of its segments. From now on, the following business segments will be considered:

• Technical Applications
• Industrial Production
• Trading & Services

In absolute terms, turnover and earnings rose most strongly in the Technical Applications segment. This growth is primarily attributable to the incorporation of Reimelt Henschel. Turnover for the Technical Applications segment was €71m for the first half-year, with an EBIT of €4.7m.

In terms of its portfolio, the Industrial Production segment is unchanged compared to the previous year. However, both turnover and EBIT have risen considerably, to €14m and €1.3m respectively.

Similarly, business activity in the Trading & Services segment underwent organic expansion. Turnover rose to €9.4m compared with the equivalent period of the previous year. However, the earnings margins in this business area are lower, due to the nature of the activities. The EBIT generated was €0.2m. As of June 26, 2008, DTS has also been added to this segment, although as far as the first half-year of 2008 is concerned, it has had no effect on the turnover and income of the Trading & Services segment, since it was acquired at the end of the half-year.

Employees

The number of employees in the MBB Group increased by 595 to 1,864 in comparison to the equivalent day of the previous year. This represents an increase of 47%. This number includes employees of the Reimelt Henschel group and those at DTS, both of which were not considered in the previous year.

Chances and Risks Report

The chances and risks with respect to business developments for the MBB Group are described in the report from the year 2007, available from our website. There have been no appreciable changes to the chances and risks discussed therein since December 31, 2007.

Supplementary Report

As indicated above, since the end of the reporting period, Reimelt Henschel have received an order with a value of €15m and the business operations at Wilhelm Guth Engineering GmbH & Co. KG have been taken over as part of an asset deal. Other than these, no events of any significance have taken place since the end of the reporting period.

Forecast Report

Following the takeover of DTS, we have raised our original turnover target from €180m to over €190m. The good performance during the first half of 2008 was the reason for raising our turnover forecast. At the same time, we hereby confirm our expected earnings per share of €1.65 for 2008.

Berlin, August 29, 2008

Yours faithfully,

Dr. Christof Nesemeier Gert-Maria Freimuth

Chief Executive Officer Chief Investment Officer

IFRS Consolidated Interim Financial Report 2008

Half year

Consolidated Income Statement (IFRSs) (unaudited)	01.01.08-30.06.08 €k	01.01.07-30.06.07 €k
Revenue	94,118	41,651
Reversal of credit difference from acquisition accounting	500	0
Income from removals from consolidated group/change in minority interests	0	1,281
Other operating income	3,478	1,992
Changes in work in process and finished goods	-656	520
Operating output	97,440	45,444
Cost of raw materials, consumables and supplies	-45,680	-19,176
Cost of purchased services	-7,993	-1,123
Cost of materials	-53,673	-20,299
Wages and salaries	-19,158	-7,965
Social security, pensions and other benefit costs	-3,867	-1,942
Personnel expenses	-23,024	-9,907
Other operating expenses	-11,197	-8,947
Earnings before interest, taxes, depreciation and amortization (EBITDA)	9,545	6,291
Amortization, depreciation and write-downs	-2,611	-2,085
Earnings of associates	0	24
Earnings before interest and taxes (EBIT)	6,934	4,230
Other interest and similar income	457	158
Interest and similar expenses	-1,234	-879
Financial result	-777	-721
Earnings before taxes (EBT)	6,157	3,509
Income taxes	-1,240	117
Other taxes	-65	-140
Earnings for the period	4,852	3,486
Minority interests	-215	-387
Consolidated profit for the year	4,638	3,099
Earnings per share (€)	0.70	0.47

Quarter

Consolidated Income Statement (IFRSs) (unaudited)	01.04.08-30.06.08 €k	01.04.07-30.06.07 €k
Revenue	49,364	22.280
Reversal of credit difference from acquisition accounting	500	0
Income from removals from consolidated group/change in minority interests	0	1,281
Other operating income	1,278	1,269
Changes in work in process and finished goods	1,051	259
Operating output	52,193	25,089
Cost of raw materials, consumables and supplies	-25,149	-10,459
Cost of purchased services	-3,483	-601
Cost of materials	-28,632	-11,060
Wages and salaries	-9,366	-4,061
Social security, pensions and other benefit costs	-1,897	-1,005
Personnel expenses	-11,263	-5,066
Other operating expenses	-6,653	-4,783
Earnings before interest, taxes, depreciation and amortization (EBITDA)	5,645	4,180
Amortization, depreciation and write-downs	-1,090	-1,118
Earnings of associates	0	24
Earnings before interest and taxes (EBIT)	4,555	3,086
Other interest and similar income	284	82
Interest and similar expenses	-589	-475
Financial result	-305	-393
Earnings before taxes (EBT)	4,250	2,693
Income taxes	-625	189
Other taxes	-32	-108
Earnings for the period	3,594	2,774
Minority interests	-178	-199
Consolidated profit for the year	3,416	2,575
Earnings per share (€)	0.52	0.39

Balance Sheet Assets (IFRSs)	June 30, 2008 (unaudited) €k	Dec. 31, 2007 (audited) €k
Non-current assets
Franchises, industrial rights and similar rights and assets	2,670	1,663
Goodwill	2,463	780
Intangible assets	5,133	2,443
Land an buildings including buildings on third-party land	28,549	28,761
Technical equipment and machines	16,960	16,789
Other equipment, furniture and fi xtures	3,645	2,626
Payments on account and assets under construction	526	1,505
Property, plant and equipment	49,679	49,681
Shares in affi liated entities	397	397
Investments in associates	47	47
Equity investments	2	2
Loans to affi liated entities	258	248
Other loans	349	496
Financial assets	1,053	1,190
Deferred taxes	3,301	4,729
	59,166	58,043
Current assets Raw materials, consumables and supplies	5,674	8,702
Work in process	5,173	5,358
Finished goods	7,040	7,208
Payments on account	599	485
Inventories	18,486	21,753
Trade receivables	35,303	20,454
Other assets	7,516	4,722
Trade receivables and other assets	42,819	25,176
Securities	1,467	1,596
Cash	24	27
Bank balances	16,898	25,323
Cash on hand, bank balances	16,922	25,350
	79,694	73,875
Total assets	138,860	131,918

Balance Sheet Equity and liabilities (IFRSs)	June 30, 2008 (unaudited) €k	Dec. 31, 2007 (audited) €k
Equity
Subscribed capital	6,600	6,600
Capital reserves	15,251	15,251
Legal reserve	61	61
Earnings carried forward	24,199	10,570
Currency translation differences	1,176	416
Profit for the year	4,638	13,629
Minority interests	4,189	3,974
	56,114	50,501
Non-current liabilities and provisions
Liabilities to banks	16,482	11,548
Other liabilities	1,273	1,251
Liabilities	17,755	12,799
Pension provisions	3,293	3,356
Provisions for deferred taxes	6,760	7,415
Provisions	10,053	10,771
	27,807	23,570
Current liabilities and provisions
Liabilities to banks	10,964	14,611
Payments on account received	1,590	6,138
Trade payables	15,793	12,128
Other liabilities	7,089	5,659
Accruals	6,451	3,904
Liabilities	41,887	42,440
Tax provisions	1,073	498
Other provisions	11,980	14,909
Provisions	13,053	15,407
	54,939	57,847
Total equity and liabilities	138,860	131,918

Consolidated Cash Flow Statement (unaudited)	First Half Year 2008 €k	First Half Year 2007 €k
1. Cash flow from operating activities
Earnings before interest and taxes (EBIT)	6,934	4,230
Adjustments for non-cash transactions:
Depreciation and amortization of non-current assets	2,611	2,085
Loss/gain on disposal of assets	-13	0
Credit difference from acquisition accounting posted to income	0	0
Income from removal from consolidated group	0	-1,281
Other non-cash expenses and income	-21	-12
Subtotal	2,577	792
Changes in working capital:
Increase in inventories, trade receivables and other assets	-12,948	-3,364
Decrease/increase in trade payables and other liabilities	42	-3,107
Subtotal	-12,906	-6,471
Income tax paid	-467	-137
Interest received	457	158
Subtotal	-10	21
Cash flow from operating activities	-3,405	-1,428
2. Cash flow from investing activities
Cash received from disposals of property, plant and equipment	30	2,508
Cash received from disposals of financial assets	137	98
Cash paid for investments in intangible assets	-100	-51
Cash paid for investments in property, plant and equipment	-2,259	-1,857
Cash paid for investments in financial assets	0	0
Acquisition of consolidated entities	-1,147	0
Sale of consolidated entities	0	2,135
Cash flow from investing activities	-3,339	2,833

Consolidated Cash Flow Statement	First Half	First Half
(unaudited)	Year 2008	Year 2007
	€k	€k
3. Cash flow from financing activities
Profit distributions to shareholders	0	-660
Cash received from borrowings	3,068	2,219
Repayment of borrowings	-3,647	-55
Interest paid	-1,234	-879
Cash flow from financing activities	-1,813	625
Cash and cash equivalents at the end of the period
Change in cash and cash equivalents (subtotal of 1 to 3)	-8,557	2,030
Cash and cash equivalents at the beginning of the period	26,946	10,463
Cash and cash equivalents at the end of the period	18,389	12,493
Composition of cash and cash equivalents
Cash on hand, bank balances	16,922	12,164
Securities	1,467	329
Cash and cash equivalents at the end of the period	18,389	12,493

Consolidated Statement of Changes in Equity (unaudited)

	Subscribed Capital	Revenue reserve	Capital reserves
	€k	€k	€k
January 1, 2007	6,600	61	15,251
Dividend paid	0	0	0
Subtotal	6,600	61	15,251
Increase in minority interests	0	0	0
Currency translation differences	0	0	0
Consolidated profit for the year	0	0	0
Total recognized income and expenses
for the year	0	0	0
December 31, 2007	6,600	61	15,251
Dividends paid	0	0	0
Subotal	6,600	61	15,251
Change in minority interests	0	0	0
Currency translation differences	0	0	0
Consolidated profit for the year	0	0	0
Total recognized income and expenses for the year	0	0	0
June 30, 2008	6,600	61	15,251

Consolidated Interim Financial Report

Consolidated equity €k	Minority interests €k	Total consolidated equity €k	Earned consolidated equity €k	Currency translation differences €k
35,520	1,504	34,016	11,231	873
-661	0	-661	-661	0
34,859	1,504	33,355	10,570	873
2,541	2,541	0	0	0
-457	0	-457	0	-457
13,558	-71	13,629	13,629	0
13,558	-71	13,629	13,629	0
50,501	3,974	46,527	24,199	416
0	0	0	0	0
50,501	3,974	46,527	24,199	416
0	0	0	0	0
760	0	760	0	760
4,853	215	4,638	4,638	0
4,853	215	4,638	0	0

15

Consolidated Interim Financial Report 2008 Explanatory Notes

Financial Statement

The half-year report of the MBB Group for the period 01.01.08 to 30.06.08 was compiled in accordance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) and conforms with IAS 34.

Accounting and Valuation Methods

The accounting and valuation principles generally correspond with those applied in the Group fnancial statements as on December 31, 2007. The fnancial statements are affected by the accounting and valuation methods as well as assumptions and estimates which affect the level and recognition of assets, liabilities and contingent liabilities on the balance sheet and of the income and expenditure items. Sales-related fgures are accrued throughout the year.

Segment Reporting

For MBB to undergo further growth requires a change to its organisational structures and in turn a modification of its segments. From now on, the following business segments will be considered:

• Technical Applications

This segment comprises those holdings whose business model is based to a large extent on customer specifications, and for which company expertise and consultancy services form a considerable proportion of the service performed. The members of the Reimelt-Henschel group of companies, and the Delignit business group belong to this segment.

• Industrial Production

This segment comprises those holdings whose primary strengths lie in the production of products which are relatively standardised. Accordingly, the Hanke and OBO holdings belong to this segment.

• Trading & Services

This segment comprises those holdings in the MBB portfolio who perform specialised services for their customers without conducting any production of their own, or who conduct trading activities. The holdings in this segment are DTS and Huchtemeier.

First Half-Year 2008 (unaudited)	Technical Applications	Industrial Production	Trading & Services	Consolidation	Group
	€k	€k	€k	€k	€k
Third parties	70,656	14,007	9,446	9	94,118
Other segments	304	0	0	-304	0
Total revenue	70,960	14,007	9,446	-295	94,118
Earnings (EBIT)	4,733	1,326	237	638	6,934
Amortization and depreciation	1,680	901	19	11	2,611
Share of profit of an associate	0	0	0
Capital expenditure	1,980	367	12
Investments in associates	0	0	47
Segment assets	88,519	20,471	5,873
Segment liabilities	38,305	3,157	5,665

First Half-Year 2007 (unaudited)	Technical Applications	Industrial Production	Trading & Services	Consolidation	Group
	€k	€k	€k	€k	€k
Third parties	22,770	13,375	5,453	53	41,651
Other segments	278	0	0	-278	0
Total revenue	23,048	13,375	5,453	-225	41,651
Earnings (EBIT)	2,025	863	27	1,315	4,230
Amortization and depreciation	1.357	677	40	11	2,085
Share of profit of an associate	0	0	24
Capital expenditure	1,630	264	14
Investments in associates	0	0	65
Segment assets	41,518	20,715	4,452
Segment liabilities	10,417	2,437	3,118

Changes to Contingent Liabilities

There have been no changes to the contingent liabilities since the annual report for 2007.

Business Transactions with Affiliated Companies and Persons

Business transactions between fully consolidated subsidiaries and non-fully-consolidated subsidiaries are to be conducted in arm's length terms.

Company Purchases and Changes in Consolidated Subsidiaries

On June 26, 2008, MBB Industries AG indirectly acquired an 80% share in the company DTS Systeme GmbH from Herford. A capital contribution of €80k was given to the company DTS Beteiligungen GmbH & Co. KG as well as a loan of €1,400k for the acquisition of DTS Systeme GmbH. The residual 20% has been retained by the CEOs of DTS Systeme GmbH. First-time consolidation is on June 26, 2008. The company and its assets and liabilities are displayed in the current balance sheet.

Events Following the End of the Reporting Period

The MBB Industries AG Annual General Meeting which took place on June 30, 2008 approved the payment of a dividend of €0.25 per share for the year 2007. The dividend has been paid out on July 1, 2008.

Furthermore, Reimelt Henschel has purchased the business operations of Wilhelm Guth Engineering GmbH & Co. KG and acquired a large-scale contract from Russia. For further information, please see the interim group management report.

Audit Inspection

The abridged half-year report for 30.06.2008 and the interim group management report have been subjected neither to examination in accordance with §317 HGB nor inspection from an auditor.

Affirmation of Legal Representatives

We affirm that to the best of our knowledge, the picture of the assets, earnings and financial situation of the group conveyed by the interim group report corresponds with actual circumstances and that the business developments, including business results and group status, are presented in the interim group management report in such a way that the picture conveyed corresponds with actual circumstances and that the principal chances and risks associated with the anticipated development of the group in the remainder of the business year are duly described, all of the above in accordance with the accounting principles for interim reporting.

Berlin, August 29, 2008

Dr. Christof Nesemeier Gert-Maria Freimuth

Chief Executive Officer Chief Investment Officer

Financial Calendar

Analysts Conference, Frankfurt am Main "German Equity Forum" November 10, 2008

Quarterly Report, Q3 November 28, 2008

Annual Report 2008 April 30, 2009

Quarterly Report, Q1 May 29, 2009

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Contact

Investor Relations

MBB Industries AG Anne-Katrin Altmann Joachimstaler Straße 34 D-10719 Berlin Tel.: +49-30-844 153 30 Fax.:+49-30-844 153 33 www.mbbindustries.com anfrage@mbbindustries.com

© MBB Industries AG 2008

Editor:	MBB Industries AG Joachimstaler Straße 34 D-10719 Berlin
Design:	Silke Rieks, rieksdesign (Cover) Anne-Katrin Altmann (Layout)
Photography:	Andreas Rose

MBB Industries AG . Joachimstaler Straße 34 . 10719 Berlin, Germany . www.mbbindustries.com