MBB SE — Interim / Quarterly Report 2010

May 28, 2010

Quarterly Financial Report March 31, 2010

MBB Industries AG . Berlin

Quarterly Financial Report March 31, 2010 MBB Industries AG

MBB Industries in Numbers

Three months (January 01-March 31) (unaudited)	2009 IFRS	2010 IFRS	∆ 2009 / 2010
Performance (figures)	€k	€k	%
Sales revenue	42,290	29,757	-29.6
Operating output	46,411	31,118	-33.0
Material expenses	-26,421	-20,851	-21.1
Personnel expenses	-12,583	-5,907	-53.1
EBITDA	2,313	2,038	-11.9
EBITDA-Margin	5.5%	6.8%	24.9
EBIT	1,094	935	-14.5
EBIT-Margin	2.6%	3.1%	21.2
EBT	638	612	-4.1
EBT-Margin	1.5%	2.1%	36.0
Consolidated net profit after minorities	397	843	112.3
Numbers of shares	6,600,000	6,600,000	0.0
eps in €	0.06	0.13	112.3
Balance sheet figures	Dec. 31,	March 31,
	2009 €k	2010 €k	%
Non-current assets	41,647	45,260	8.7
Current assets	60,292	67,380	11.8
Thereof cash and cash equivalents	34,339	33,990	-1.0
Subscribed capital	6,600	6,600	0.0
Other equity	48,986	50,946	4.0
Total equity	55,586	57,546	3.5
Capital ratio	54.5%	51.1%	-6.3
Non-current liabilities and provisions	21,899	25,388	15.9
Current liabilities and provisions	24,454	29,706	21.5
Balance sheet total	101,939	112,640	10.5
Net debt (-) / net cash (+)*	10,725	10,613	-1.0
Employees (Key Date)	Dec.31, 2009	March 31, 2010	%
Technical Applications	751	745	-0.8
Industrial Production	270	359	33.0
Trading & Services	101	98	-3.0
Total	1,122	1,202	7.1

* This figure includes the physical gold stocks listed under Other Assets in the balance sheet.

Message from the Managing Board

Dear Shareholders,

Our Annual Report was published on April 30, and now, a month later, it is followed by our financial report for the first quarter of 2010. With a revenue of almost 30 million euros and earnings of 13 cents per share, the first quarter of the year was in line with our expectations. This is the first report to incorporate CT Formpolster GmbH, which we acquired on January 1 of this year. We are glad to have this new holding in our portfolio and welcome the employees of the company to the MBB Group.

For the year 2010 as a whole, we continue to forecast a revenue of 120 million euros and earnings in excess of the level achieved in 2009. Furthermore, we are confident that we will continue to grow beyond this forecast level in terms of revenue and earnings by acquiring further additions to our portfolio. We would like to invite you to our Annual Shareholder Meeting, which is to be held in Berlin on June 30. The managing board and board of directors have proposed a dividend of 50 cents per share, which means that you, as a shareholder, will participate in the extraordinary success of the sale of Reimelt Henschel in 2009. This said, we now present the report for the first quarter of 2010, as follows.

In the summer of 2005, a photographic project was initiated, entitled 'An artistic documentation and interpretation of the work done by MBB'. The project expands as new holdings are added to the portfolio. All images shown in this report originate from this project.

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

General and Business Conditions

The worldwide financial crisis is still placing increased strain on the real economy. This will continue to impact on the economic trends in our companies' markets. Even though we faced a slight enhancement in the first quarter, the aforementioned circumstances could lead to the value development of MBB's existing portfolio slowing down with respect to previous years. At the same time, we note that the number of holding companies on offer is being maintained at the current high level, whereby the number of companies that have come out of the crisis relatively unscathed and with positive future prospects continues to be relatively low. In the latter case, there is often competition among buyers, which in our experience tends to lead to inflated prices. However, it should be stated that our equity base and cash position means that we are recognised as a potential buyer, which makes us confident that we will be able to make the most of our future chances to grow through acquisition.

Earnings, Assets, and Financial Situation

The first three months of the fiscal year 2010 were again influenced by the continuing financial and economic crisis. This had varying effects on the MBB Group's individual holdings. In particular, our listed holding, Delignit, continues to face serious challenges resulting from the severe drop in revenue, forcing it to post a considerable loss for the year 2009. Revenue for the first quarter of 2010 showed a slight improvement but as far as earnings are concerned, it again generated a significant loss. See also the segment report.

Thanks to the solid base inherited from the financial year 2009, the asset and financial situations continue to be positive. For a comparison of the figures please keep in mind that the Reimelt-Henschel-Group was deconsolidated with effect from May 31, 2009. Furthermore the MBB Industries AG acquired the CT Formpolster GmbH with effect from January 1, 2010, which is fully consolidated included into this quarterly report.

The MBB Group decreased its consolidated turnover for the first three months of the year by 29.6 % to €29.8m compared with the corresponding period of the previous year (€42.3m). Operating output for the same period decreased from €46.4m for the first three months of 2009 to €31.1m in 2010. This was the result of the sale of the Reimelt-Henschel-Group in May 2009, so that the corresponding revenues are included in the prior year figures. The other operative earnings of €1.3m decreased compared to the previous year (€2.1m) and stem from initial consolidation of CT Formpolster GmbH ("bargain purchase").

Material costs increased relative to the sum of operating output and changes in inventories of €29.8m from 59.6% to 69,9% for the first three months of 2010 compared with same period of the previous year. This was triggered by changes in the holding portfolio, which in turn affected the group's real net output ratio.

The EBITDA (earnings before interest, tax, depreciation and amortisation) attained a level of €2.0m, representing a decrease compared to the equivalent period in the previous year (€2.3m). At the same time, the EBITDA margin relative to the sum of operating output and changes in inventories rose from 5.2% to 6.8%, caused among other things by the changed composition of the holding portfolio. The EBIT (earnings before interest and tax) of the MBB Group reached €0.9m for the three month period just ended (€1.1m in the equivalent period of the previous year). Taking into account the financial result of minus €0.3m, EBT (earnings before tax) is at €0.6m (€0.6m in the equivalent period of the previous year). This puts it at 2.1% of the sum of operating output and changes in inventories (1.4% in the equivalent period of the previous year). Taking into account a tax income of €0.2m, caused essentially by the recognition of tax loss carryforwards, the result for the quarter is €0.8m. The earnings share from minority interests is plus €0.1m, resulting in a consolidated net income for the first quarter of €0.8m, which is in excess of the level attained in the same period of the prior year (€0.4m).

The consolidated interim financial statements of March 31, 2010 show an equity capital of €57.5m (€55.6m on December 31, 2009). Oriented to the consolidated balance sheet total of €112.6m, the MBB Group has a capital ratio of 51.1% that is – due to the higher balance sheet total as the result of the acquisition of the CT Formpolster GmbH taking effect by January 1, 2010 – below the ratio of 54,5% on December 31, 2009.

On March 31, 2010, the MBB Group shows liabilities to banks of €24.4m (€24.6m on December 31, 2009) and cash and cash equivalents, short-term securities and physical stocks of gold of €35.0m (€35.3m on December 31, 2009). This puts the MBB Group's balance from the above liabilities and cash positions (net debt / net cash) at €10.6m net cash, which is a slight decrease against December 31, 2009 were a net cash of € 10.7m was reported.

Development of the Segment

The following business segments will be considered:

• Technical Applications
• Industrial Production
• Trading & Services

In comparison with the previous year, revenues fell strongly in the Technical Applications segment in the first quarter. This decrease is attributable to the sale of the Reimelt-Henschel-Group in May 2009. Turnover for the Technical Applications segment – respectively the Delignit group as sole holding in this segment - was €7.1m for the first three months (€27.8m in the same period last year including Reimelt Henschel), the EBIT of minus €0.8m is also below previous year (+€1.7m including Reimelt Henschel).

The Industrial Production segment shows a marked increase in revenues. Turnover for the Industrial Production segment was €13.3m until March 31, 2010 after €6.1m in the same period 2009. The increase is mostly the result of the acquisition of the CT Formpolster GmbH on January 1, 2010, which since that date enhances the segment industrial production. The EBIT of €1.7m also represents a marked increase compared to the equivalent period of the previous year (€0.5m).

In the Trading & Services segment compared to the previous year revenues rose to €9.5m (€8.9m in the equivalent period of the previous year). The EBIT of this segment with €0.2m undercut the last year's level of €0.4m.

Employees

Currently standing at 1,202, the number of employees in the MBB Group has declined compared to 1,794 on the previous year closing date; this was caused by the sale of the Reimelt-Henschel-Group. Adjusted to take account of this, the number of employees in our holdings remained the same, whereby capacity adjustments in the Delignit Group were offset by the increasing number of employees due to the acquisition of the CT Formpolster GmbH with their 88 employees and an increase in employees at Hanke Tissue.

Chances and Risks Report

The chances and risks involved in the business development of the MBB Group are described in the Combined Management Report for 2009. This already made mention of the particular risk represented by Delignit AG's negative performance; this risk should be stressed at this point in the light of the general development of the company in the first quarter. Over and above this, no essential changes have occurred with respect to the described chances and risks since December 31, 2009.

The risk management system of MBB Industries AG allows the early recognition of these risks and the immediate adoption of measures.

Supplementary Report

No events of significance have taken place since the end of the reporting period.

Forecast Report

In 2010 annual sales of MBB Group will be approx. €120m. MBB will - as in all previous years - generate a sustainably positive annual result for 2010.

Berlin, May 28, 2010

The Managing Board

IFRS Consolidated Interim Financial Report

Three months

Consolidated Income Statement (IFRS) (unaudited)	01.01.10-31.03.10 €k	01.01.09-31.03.09 €k
Revenue	29,757	42,290
Reversal of credit difference from acquisition accounting	828	0
Other operating income	467	2,104
Increase (+) / Decrease (-) in work in process and finished goods	66	2,017
Operating output	31,118	46,411
Cost of raw materials, consumables and supplies	-15,980	-22,189
Cost of purchased services	-4,871	-4,232
Cost of materials	-20,851	-26,421
Wages and salaries	-4,632	-10,236
Social security, pensions and other benefit costs	-1,275	-2,348
Personnel expenses	-5,907	-12,583
Other operating expenses	-2,322	-5,093
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	2,038	2,313
Amortisation, depreciation and write-downs	-1,103	-1,219
Share of profit or loss of associates	0	0
Earnings before interest and taxes (EBIT)	935	1,094
Other interest and similar income	57	205
Interest and similar expenses	-380	-661
Financial result	-323	-456
Earnings before taxes (EBT)	612	638
Income taxes	194	-371
Other taxes	-23	-43
Earnings for the period	783	224
Minority interests	60	174
Consolidated profit for the year	843	397
Earnings per share (€)	0.13	0.06

Condensed Statement of Comprehensive Income

Condensed Statement of Comprehensive Income (unaudited)	01.01.10-31.03.10 €k	01.01.09-31.03.09 €k
Consolidated profit for the first three
months	783	224
Differences from currency translation	852	-1,114
Net value gain (loss) on available for sale finan
cial assets	325	0
Other equity changes	0	-9
Total comprehensive income	1,960	-899
Thereof attributable to the owners of MBB	1,987	-717
Thereof attributable to minority interests	-27	-182

Balance Sheet Assets (IFRS)	March 31, 2010 (unaudited) €k	Dec. 31, 2009 (audited) €k
Non-current assets
Franchises, industrial rights and similar rights and assets	1,565	1,616
Goodwill	1,960	1,960
Intangible assets	3,525	3,576
Land and buildings including buildings on third-party land	19,824	19,513
Technical equipment and machines	15,501	12,631
Other equipment, furniture and fixtures	2,298	2,292
Payments on account and assets under construction	2,114	1,846
Property, plant and equipment	39,737	36,282
Investments in associates	45	45
Other loans	406	390
Financial assets	451	435
Deferred taxes	1,547	1,354
	45,260	41,647
Current assets
Raw materials, consumables and supplies	4,938	4,076
Work in progress	3,685	3,170
Finished goods	6,938	6,348
Payments on account	33	13
Inventories	15,594	13,607
Trade receivables	10,292	6,466
Other assets	7,504	5,880
Trade receivables and other assets	17,796	12,346
Securities	11,065	6,877
Cash	32	9
Bank balances	22,893	27,453
Cash on hand, bank balances	22,925	27,462
	67,380	60,292
Total assets	112,640	101,939

Balance Sheet Equity and liabilities (IFRS)	March 31, 2010 (unaudited) €k	Dec. 31, 2009 (audited) €k
Equity
Subscribed capital	6,600	6,600
Capital reserve	15,251	15,251
Legal reserve	61	61
Retained Earnings	32,005	30,018
Minority interests	3,629	3,656
	57,546	55,586
Non-current liabilities and provisions
Liabilities to banks	15,626	16,137
Other liabilities	729	715
Liabilities	16,355	16,852
Pension provisions	5,287	2,017
Deferred tax liabilities	3,746	3,030
	25,388	21,899
Current liabilities and provisions
Liabilities to banks	8,801	8,452
Payments on account received	65	105
Trade payables	11,923	8,889
Other liabilities	4,446	3,500
Accruals	1,700	1,326
Liabilities	26,935	22,272
Tax provisions	193	242
Other provision	2,578	1,940
Provisions	2,771	2,182
	29,706	24,454
Total equity and liabilities	112,640	101,939

Consolidated Cash Flow Statement (Jan. 1 - March 31) (unaudited)	2010 €k	2009 €k
1. Cash flow from operating activities
Earnings before interest and taxes (EBIT)	935	1,094
Adjustments for non-cash transactions:
Depreciation and amortisation of non-current assets	1,103	1,219
Other non-cash expenses and income	-23	-507
Subtotal	1,080	712
Changes in working capital:
Increase (-) / decrease (+) in inventories, trade receivables and other assets	-2,489	-212
Increase (+) / decrease (-) in trade payables and other liabilities	1,599	-4,922
Subtotal	-890	-5,134
Income tax paid	-36	-544
Interest received	57	205
Subtotal	21	-339
Cash flow from operating activities	1,146	-3,668
2. Cash flow from investing activities
Cash received from disposals of property, plant and equipment	0	64
Cash inflow (+) / Cash outflow (-) from investments in intangible assets	0	209
Cash inflow (+) / Cash outflow (-) from investments in tangible assets	-562	916
Cash inflow (+) / Cash outflow (-) from investments in financial assets	-16	-38
Cash inflow (+) / Cash outflow (-) from available-for-sale investments	-4,188	0
Acquisition of consolidated entities	-353	0
Cash flow from investing activities	-5,119	1,151

Consolidated Cash Flow Statement (Jan. 1 - March 31) (unaudited)	2010 €k	2009 €k
3. Cash flow from financing activities
Profit distributions to shareholders	0	0
Cash received from borrowings	349	2,600
Repayment of borrowings	-511	-519
Interest paid	-402	-661
Cash flow from financing activities	-564	1,421
Cash and cash equivalents at the end of the period
Change in cash and cash equivalents (subtotal of 1 to 3)	-4,537	-1,096
Effects of exchange rate changes (no cash effect)	0	-1,115
Cash and cash equivalents at the beginning of the period	27,462	25,085
Cash and cash equivalents at the end of the period	22,925	22,874

Consolidated Statement of Changes in Equity (unaudited)

	Subscribed capital	Legal reserve	Capital reserve
	€k	€k	€k
January 1, 2009	6,600	61	15,251
Dividend paid	0	0	0
Subtotal	6,600	61	15,251
Amounts directly recognised in equity	0	0	0
Currency translation differences	0	0	0
Consolidated profit for the year	0	0	0
Total comprehensive income	0	0	0
December 31, 2009	6,600	61	15,251
Dividends paid	0	0	0
Subtotal	6,600	61	15,251
Amounts directly recognised in equity	0	0	0
Currency translation differences	0	0	0
Consolidated profit	0	0	0
Total comprehensive income	0	0	0
March 31, 2010	6,600	61	15,251

Consolidated Interim Financial Report

						Retained earnings
	Consolidated equity	Minority interests	Attributable to owners of MBB AG	Earned consolidated equity	Available-for-sale financial assets	Currency translation differences
€k		€k	€k	€k	€k	€k
	54,265	3,377	50,888	30,578	0	-1,602
	-1,650	0	-1,650	-1,650	0	0
	52,615	3,377	49,238	28,928	0	-1,602
-56		0	-56	0	-56	0
-625		173	-798	0	0	-798
3,652		106	3,546	3,546	0	0
2,971		279	2,692	3,546	-56	-798
	55,586	3,656	51,930	32,474	-56	-2,400
0		0	0	0	0	0
	55,586	3,656	51,930	32,474	-56	-2,400
325		0	325	0	325	0
852		33	819	0	0	819
783		-60	843	843	0	0
1,960		-27	1,987	843	325	819
	57,546	3,629	53,917	33,317	269	-1,581

Consolidated Interim Financial Report Explanatory Notes

Financial Statement

The interim financial report of the MBB Group for the period January 1, 2010 to March 31, 2010 was prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the EU, published by the International Accounting Standards Board (IASB), and conforms to IAS 34.

Accounting and Valuation Methods

The accounting and valuation principles correspond in general with those applied in the Group financial statements as of December 31, 2009. The financial statements are affected by 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 expenses items. Sales-related figures are accrued throughout the year.

IFRS 3 (revised 2008) was adopted in the current period for the first time. The standard is applicable to business combinations for which the acquisition date is on or after the beginning of the first annual period beginning on or after July 1, 2009.

Segment Reporting

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 enterprises of the Delignit group belong to this segment. The comparative figures of 2009 also include the figures of the Reimelt-Henschel-Group, which belonged to this segment until it was sold in May 2009.

• 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, as does CT Formpolster GmbH, which acquired on January 1, 2010.

• Trading & Services

This segment comprises those holdings in the MBB portfolio that 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.

01.01.10 - 31.03.10 (unaudited)	Technical Applications	Industrial Production	Trading & Services	Reconciliation	Group
	€k	€k	€k	€k	€k
Third parties	6,911	13,088	9,458	300	29,757
Other segments	165	230	0	-395	0
Total revenue	7,076	13,318	9,458	-95	29,757
Earnings (EBIT)	-831	1,710	192	-136	935
Amortisation and depreciation	417	513	160	13	1,103
Share of profit of associates	0	0	0
Capital expenditure	121	397	32
Investments in associates	0	0	45
Segment assets	33,852	32,869	7,160
Segment liabilities	8,016	10,499	4,626

01.01.09 - 31.03.09 (unaudited)	Technical Applications	Industrial Production	Trading & Services	Reconciliation	Group
	€k	€k	€k	€k	€k
Third parties	27,650	6,026	8,615	0	42,290
Other segments	175	54	295	-524	0
Total revenue	27,825	6,080	8,910	-524	42,290
Earnings (EBIT)	1,746	497	405	-1,554	1,094
Amortisation and depreciation	787	273	146	14	1,219
Share of profit of associates	0	0	0
Capital expenditure	349	276	102
Investments in associates	0	0	36
Segment assets	83,926	17,309	8,020
Segment liabilities	35,476	2,290	4,660

Changes to Contingent Liabilities

With effect from January 1, 2010 a further subinvestment (in the form of so called "phantom shares") in Hanke Tissue Sp. z o.o., Kostrzyn, Poland has been established with respect to the general manager of the company. The subinvestor is entitled to both 3% of the profit and any proceeds from sale or liquidation. The shares were transferred from MBB (2.4%) and existing subinvestors (0.6%). This means that after a prepaid dividend of €336k, which is claimed solely by MBB, subinvestors are collectively entitled to 22.4% of the profit distribution.

Similarly, in the case of a liquidation or company sale, subinvestors collectively hold 22.4% of potential liquidation proceeds or sale earnings, whereby in the event of the company being sold, €2,650k of the proceeds from the sale accrue solely to MBB (after settlement of the aforementioned 3% share).

Business Transactions with Affiliated Companies and Persons

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

Changes in Consolidated Subsidiaries

On January 1, 2010 MBB Industries AG acquired - through its subsidiary OBO Modulan GmbH - 100% of the shares of CT Formpolster GmbH, Löhne, and now incorporates the company in its consolidated financial statements. CT Formpolster GmbH produces polyether foams with a variety of technical attributes. Its customers comprise the mattress industry, upholstered furniture producers, caravan makers and vehicle manufacturers.

By making the acquisition, MBB Industries AG can be seen to be continuing its successful acquisition strategy. For the segment industrial production a considerable synergetic potential in terms of raw material purchasing as well as further development of production procedures are expected.

The cost of CT Formpolster GmbH was €377.5k and was paid in cash. On the acquisition date the following assets and liabilities were acquired.

Assets and Liabilities CT Formpolster GmbH	€k
Current Assets
Cash and cash equivalents	25
Trade and other receivables	3,239
Inventories	1,709
Non-current assets
Intangible assets	24
Plant and equipment	3,209
Current liabilities
Trade payables	1,901
Other payables and provisions	990
Non-current liabilities
Pensions	3,389
Deferred tax liabilities	722
Net assets	1,204

The fair values of the receivables acquired correspond to their carrying amounts. As a result of the acquisition, a bargain purchase of €826k was indicated under Other Revenues in the income statement on the acquisition date.Since the acquisition date, CT Formpolster GmbH's contribution to the group quarterly revenue and earnings were €6,179k and €43k respectively.

Events Following the End of the Reporting Period

No further events of any significance have taken place since the end of the reporting period.

Audit Inspection

The condensed interim financial report as of March 31, 2010 and the interim group management report have neither been subjected to an audit in accordance with § 317 HGB nor reviewed by an auditor.

Affirmation of Legal Representatives

To the best of our knowledge, and in accordance with the applicable reporting principles for interim reporting, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.

Berlin, May 28, 2010

Dr. Christof Nesemeier Chief Executive Officer

Gert-Maria Freimuth Chief Investment Officer

Dr. Philipp Schmiedel-Blumenthal Chief Operating Officer

Financial Calendar

Annual Meeting 2010: June 30, 2010, 10am At the Ludwig-Erhard-Haus Fasanenstraße 85, 10623 Berlin

Half-Year Financial Report 2010: August 31, 2010

Quarterly Financial Report Q3/2010: November 22, 2010

Deutsches Eigenkapitalforum November 22-24, 2010 Frankfurt am Main

End of the fiscal year December 31, 2010

We would at this point like to draw your attention to our RSS feed. Subscribers to this feed receive company news free of charge whenever it is published, and can read it on screen. It is a quick and convenient way of keeping your information up to date. Please visit: www.mbbindustries.com/RSS.

Furthermore we would like to advise you of our MBB Newsletter. It contains all the latest news and information.

To subscribe please visit: www.mbbindustries.com/english_newsletter.

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 2010

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

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