MBB SE — Interim / Quarterly Report 2020

May 27, 2020

INTERIM STATEMENT MARCH 31, 2020

MBB SE, Berlin

MBB in figures

Three months	2020	2019	Δ 2020 /
(unaudited)	IFRS	IFRS	2019
Earnings figures (adjusted*)	€k	€k	%
Revenue	171,801	128,466	33.7
Operating performance	170,828	127,267	34.2
Total performance	174,337	129,607	34.5
Cost of materials	-90,828	-76,702	18.4
Staff costs	-51,713	-31,884	62.2
EBITDA	15,787	13,289	18.8
EBITDA margin	9.2%	10.4%
EBIT	8,947	9,309	-3.9
EBIT margin	5.2%	7.3%
EBT	6,559	8,924	-26.5
EBT margin	3.8%	7.0%
Consolidated net profit after non-controlling interests	3,909	2,876	35.9
eps in €	0.66	0.45	46.7
Number of shares in circulation	5,940	6,458	-8.0
Earnings figures (IFRS)	€k	€k	%
EBITDA	15,787	13,289	18.8
Consolidated net profit	2,817	2,771	1.7
eps in €	0.47	0.43	9.3
Figures from the statement	31 Mar	31 Dec
of financial position (IFRS)	€k	€k	%
Non-current assets	342,020	346,084	-1.2
Current assets	472,805	498,608	-5.2
thereof cash and equivalents**	311,245	340,194	-8.5
Issued capital (share capital)	5,937	5,941	-0.1
Other equity	456,112	468,611	-2.7
Total equity	462,049	474,552	-2.6
Equity ratio	56.7%	56.2%
Non-current liabilities	152,326	149,919	1.6
Current liabilities	200,450	220,221	-9.0
Total assets	814,825	844,692	-3.5
Net debt (-) or
net cash (+)**	219,006	249,838	-12.3
Employees	3,506	3,505	0.0

* For details of adjustments please see the information on the results of operations, financial position and net assets.

** This figure include physical gold stocks.

Business development, result of operations, financial position and net assets

Business development

In the first three months of 2020, MBB grew revenues by 33.7% to €171.8 million and EBITDA by 18.8% to €15.8 million. This translates to an EBITDA margin of 9.2%, which is around one percentage point lower than in the same period last year. Adjusted earnings per share amounted to €0.66 and were thus 46.7% higher than in the same period last year. As at March 31, 2020, the MBB Group had around 3,500 employees.

The Group's growth in the first quarter is due to the positive development of the Service & Infrastructure segment, which generated revenues of €80.3 million. This segment consists of DTS, which specialises in IT security products, and the Friedrich Vorwerk Group, which was acquired in 2019 and also includes the Bohlen & Doyen companies acquired in December 2019. DTS made a significant contribution to the success of the segment with revenue growth of 21.1%. Friedrich Vorwerk, a specialist in the field of energy infrastructure, generated revenues of €62.6 million in the first quarter and thereby exceeded expectations. To date, the companies in the Service & Infrastructure segment have not experienced any significant negative effects from COVID-19.

The Consumer Goods segment, which consists of the mattress manufacturer CT Formpolster and Hanke, a tissue products specialist, significantly increased profitability despite a 7.6% decrease in revenues to €22.1 million. The EBITDA improved by 29.8% compared to the same period in the previous year, in particular due to improved raw material prices. The impact of the COVID-19 pandemic on the Consumer Goods segment has been moderate so far.

The Technological Applications segment, which includes the publicly listed companies Aumann and Delignit but also OBO, which specialises in tooling products, experienced a decline in revenue by 22.8% to €69.3 million. A significant part of this decline has already been anticipated, as Aumann's revenue suffered from a weaker order intake last year. In addition, after an initially promising start to the year, both Delignit and OBO suffered from the effects of the COVID-19 pandemic towards the end of the quarter. The EBITDA in this segment ended up 67.5% lower than in the same period last year. The EBITDA margin in the first quarter was 4.6%. Within MBB, the Technological Applications segment is expected to be the most severely affected by the COVID-19 pandemic in the second quarter of 2020 and beyond.

As of March 18 2020, the Board of Directors of MBB SE decided to make use of its mandate to acquire its own shares as authorized by the Annual General Meeting on May 28, 2019, and to buy back up to 594,075 of its own shares with a maximum volume of €3.0 million and at a price no higher than €55.00 per share via the stock exchange as of March 20, 2020. The share buyback programme is scheduled to end on June 30, 2020 and the shares acquired are intended as acquisition currency or for other purposes approved by the Annual General Meeting. Under this program, 3,543 shares have been acquired by the end of the first quarter.

MBB SE's Board of Directors and Managing Directors want shareholders to participate in the company's success in an appropriate manner. Considering the high liquidity and the extremely successful 2019 financial year, the Board intends to propose an increase in the dividend for the financial year 2019 to €0.70 per eligible share to the Annual General Meeting. This would be the tenth consecutive year in which the basic dividend has been increased.

However, the Annual General Meeting will not be able to take place in May as originally planned due to the current restrictions resulting from the COVID-19 pandemic. As soon as a new date for the Annual General Meeting is set, it will be published on www.mbb.com.

Results of operations, financial position and net assets

The overall state of earnings, finances and net assets in the first quarter of 2020 is positive. After the first three months of 2020, the MBB Group's consolidated revenues of €171.8 million were 33.7% higher than in the previous year (previous year: €128.5 million). This significant growth is mainly attributable to the companies acquired in the second half of 2019.

Seite 3

The other operating income of €3.5 million (previous year: €2.3 million) encompasses income of €1.6 million from the at-equity valuation, income from capitalised development costs of €0.3 million, income from securities of €0.1 million and other income of €1.5 million. Capitalised development costs are predominantly part of the development costs at Aumann.

The cost of materials increased at a disproportionately low rate by 18.4% to €90.8 million compared to the sales growth, while personnel expenses rose by 62.2% to €51.7 million in the first quarter of 2020. The change in the cost structure results from the changed portfolio structure compared to the same period of the previous year.

EBITDA (earnings before interest, taxes, depreciation and amortisation) rose by 18.8% to €15.8 million (previous year: €13.3 million) with a margin of 9.2%. No adjustments were made to EBITDA either in the reporting period or in the same period of the previous year.

The adjusted depreciation and amortisation rose by €2.8 million to €6.8 million when compared with the same period in the previous year. The adjustments that were made to the depreciation and amortisation were €2.6 million and considered the effects of assets capitalized as part of purchase price allocations.

This resulted in an adjusted EBIT (earnings before interest and taxes) of €8.9 million (previous year: €9.3 million).

Accounting for the net finance costs of €-2.4 million (previous year: €-0.4 million), the adjusted EBT (earnings before taxes) was €6.6 million (previous year: €8.9 million). The increased net finance costs are mainly due to the earnings of the non-controlling shareholders of the Friedrich Vorwerk KG (GmbH & Co.).

Adjusted consolidated earnings after non-controlling interests amount to €3.9 million (previous year: €2.9 million) or €0.66 (previous year: €0.45) per share for the three-month period.

On March 31 2020 equity amounted to €462.0 million (31 December 2019: €474.6 million). In relation to the consolidated balance sheet totalling in €814.8 million (31 December 2019: €844.7 million), the equity ratio is 56.7%, compared to 56.2% as of 31 December 2019. The decrease of €12.6 million is mainly due to valuation effects of financial assets, which were recognised directly in other comprehensive income. By contrast, the consolidated result had a positive effect.

As at 31 March 2020, the MBB Group had cash and cash equivalents (including securities and physical gold holdings) of €311.2 million (€340.2 million as at 31 December 2019), of which €171.5 million are held within the MBB SE. After deducting the Group's financial liabilities of €92.2 million (€90.4 million as of 31 December 2019), the MBB Group's net cash position is 219.0 million compared to € 249.8 million as of 31 December 2019. The decrease in cash and cash equivalents is mainly due to the reduction of current liabilities and valuation effects of securities.

Outlook

Before the COVID-19 epidemic developed into a pandemic with currently unforeseeable consequences, MBB's management expected revenues of more than €660 million for the financial year 2020 with an adjusted EBITDA margin of 8-10%. The effects of a worsening pandemic were explicitly not considered by management at the time of this forecast. At this point in time, the impact of the COVID-19 pandemic on fiscal year 2020 cannot be quantified. Management will therefore not publish a forecast taking the COVID-19 pandemic into account until a reliable estimate is available. It must be assumed that the above-mentioned key figures cannot be achieved due to the events described.

Berlin, May 27, 2020

The Managing Directors of MBB SE

IFRS consolidated statement of profit or loss (unaudited)	1 Jan - 31 Mar 2020 €k	1 Jan - 31 Mar 2019 €k
Revenue	171,801	128,466
Increase (+) / decrease (-) in finished goods
and work in progress	-973	-1,199
Operating performance	170,828	127,267
Other operating income	3,509	2,342
Total performance	174,337	129,609
Cost of raw materials and supplies	-50,641	-60,232
Cost of purchased services	-40,187	-16,470
Cost of materials	-90,828	-76,702
Wages and salaries	-39,219	-25,579
Social security
and pension costs	-12,494	-6,305
Staff costs	-51,713	-31,884
Other operating expenses	-16,009	-7,734
Earnings before interest, taxes, depreciation,
and amortisation (EBITDA)	15,787	13,289
Amortisation and depreciation expense	-9,451	-4,267
Earnings before interest and taxes (EBIT)	6,336	9,022
Finance revenue	105	177
Finance costs	-785	562
Earnings attributable to non-controlling interests	-1,080	0
Net finance costs	-1,760	-385
Earnings before taxes (EBT)	4,576	8,637
Income tax expense	-1,286	-2,610
Other taxes	-212	-107
Profit or loss for the period	3,078	5,920
Non-controlling interests	-261	-3,149
Consolidated net profit	2,817	2,771
Earnings per share (in €)	0.47	0.43

Consolidated statement of comprehensive income

IFRS consolidated statement of comprehensive income	1 Jan -	1 Jan -
(unaudited)	31 Mar 2020	31 Mar 2019
	€k	€k
Consolidated net profit	2,817	2,771
Non-controlling interests	261	3,150
Profit or loss for the period	3,078	5,921
Items that may be subsequently reclassified
to profit and loss
Fair value changes bonds and gold	-165	414
Currency translation differences	-1,466	98
Items that not be subsequently reclassified
to profit and loss
Fair value changes shares and gold	-12,832	8,709
Other comprehensive income after taxes	-14,463	9,221
Comprehensive income for the reporting period	-11,385	15,142
thereof attributable to:
- Shareholders of the parent company	-9,988	11,332
- Non-controlling interests	-1,397	3,810

Consolidated statement of financial position

Statement of financial position	31 Mar 2020	31 Dec 2019
Assets (IFRS)	unaudited	audited
	€k	€k
Non-current assets
Concessions, industrial property rights and similar rights	23,577	25,278
Goodwill	44,449	44,449
Advance payments and assets under development	139	134
Intangible assets	68,165	69,861
Land and buildings
including buildings on third-party land	80,699	80,021
Technical equipment and machinery	49,580	51,176
Other equipment, operating and office equipment	21,639	22,138
Advance payments and assets under development	5,451	4,514
Property, plant and equipment	157,369	157,849
Investments in associates	14,074	13,214
Investment securities	83,142	89,549
Other loans	1,245	1,281
Financial assets	98,461	104,044
Deferred tax assets	18,025	14,330
	342,020	346,084
Current assets
Raw materials and supplies	19,495	17,778
Work in progress	7,468	7,384
Finished goods and commodities	12,375	13,876
Advance payments	9,096	8,023
Inventories	48,434	47,061
Trade receivables	50,302	73,101
Contract assets	126,478	113,042
Other current assets	19,489	14,760
Trade receivables
and other current assets	196,269	200,903
Gold	3,701	3,570
Securities	3,595	3,169
Financial assets	7,296	6,739
Cash in hand	99	84
Bank balances	220,707	243,821
Cash in hand, bank balances	220,806	243,905
	472,805	498,608
Total assets	814,825	844,692

Statement of financial position	31 Mar 2020	31 Dec 2019
Equity and liabilities (IFRS)	unaudited	audited
	€k	€k
Equity
Issued capital	5,937	5,941
Capital reserve	253,880	253,260
Legal reserve	61	61
Retained earnings	72,299	82,286
Non-controlling interests	129,872	133,004
	462,049	474,552
Non-current liabilities
Liabilities to banks	44,658	47,297
Liabilities to non-controlling interests	21,766	20,686
Liabilities from participation rights	9,963	9,963
Other liabilities	6,399	6,469
Lease liabilities	13,194	12,068
Pension provisions	28,394	28,387
Other provisions	1,174	1,195
Deferred tax liabilities	26,778	23,854
	152,326	149,919
Current liabilities
Liabilities to banks	24,553	22,128
Contract liabilities	32,475	35,424
Trade payables	48,377	56,707
Liabilities to non-controlling interests	6,519	7,540
Other liabilities	21,907	28,962
Lease liabilities	9,833	8,863
Provisions with the nature of a liability	34,524	35,438
Tax provisions	8,459	7,750
Other provisions	13,803	17,409
	200,450	220,221
Total equity and liabilities	814,825	844,692

Consolidated statement of cash flows

Consolidated statement of cash flows (unaudited)	1 Jan - 31 Mar 2020	1 Jan - 31 Mar 2019
	€k	€k
1. Cash flow from operating activities
Earnings before interest and taxes (EBIT) Adjustments for non-cash transactions	6,336	9,022
Amortisation and depreciation	9,451	4,267
Increase (+) / decrease (-) in provisions	-3,598	-1,681
Gains (-) / losses (+) from disposal of PPE	-485	-233
Other non-cash expenses / income	-876	283
	4,492	2,636
Change in working capital:
Increase (-) / decrease (+) in inventories, trade receivables
and other assets	3,983	-6,127
Decrease (-) / increase (+) in trade payables
and other liabilities	-20,339	-9,340
	-16,356	-15,467
Income taxes paid	-2,479	-2,894
Interest received	105	177
	-2,374	-2,717
Cash flow from operating activities	-7,902	-6,526
2. Cash flow from investing activities
Investments (-) / divestments (+) intangible assets	-849	-984
Investments (-) / divestments (+) property, plant and equipment	-5,423	-2,335
Investments (-) / divestments (+) of financial assets and securities	-7,726	-1,469
Business combination (less cash and cash equivalents received)	0	-6,368
Cash flow from investing activities	-13,998	-11,156
3. Cash flow from financing activities
Payments to non-controlling interests	-11	-103
Payments for the acqisition of shares without change of control	-940	0
Share buy back programme	-168	0
Proceeds from borrowing financial loans	6,928	2,648
Repayments of financial loans	-4,048	-4,768
Payments for finance lease	-2,133	-1,031
Interest payments	-772	-553
Cash flow from financing activities	-1,144	-3,807
Cash and cash equivalents at end of period
Change in cash and cash equivalents
(Subtotal 1-3)	-23,044	-21,489
Effects of changes in foreign exchange rates (non-cash)	-55	82
Cash and cash equivalents at start of reporting period	243,905	307,516
Cash and cash equivalents at end of period	220,806	286,109
Composition of cash and cash equivalents
Cash in hand	99	22
Bank balances	220,707	286,087
Reconciliation to liquidity reserve on 31 Mar	2020	2019
Cash and cash equivalents at end of period	220,806	286,109
Gold	3,701	2,958
Securities	86,738	76,255
Liquidity reserve on 31 Mar	311,245	365,322

Segment reporting

1 Jan - 31 Mar 2020 (unaudited)	Technological Applications €k	Consumer Goods €k	Service & Infrastructure €k	Recon- ciliation €k	Group €k
Revenue from third parties	69,343	22,144	80,314	0	171,801
Other segments	0	20	118	-138	0
Total revenue	69,343	22,164	80,432	-138	171,801
EBITDA	3,163	2,403	10,884	-663	15,787
Amortisation and depreciation	2,025	869	6,502	55	9,451
Investments	998	456	4,874
Segment assets	258,693	51,513	159,266
Segment liabilities	85,965	14,732	110,384

1 Jan - 31 Mar 2019 (unaudited)	Technological Applications €k	Consumer Goods €k	Service & Infrastructure €k	Recon- ciliation €k	Group €k
Revenue from third parties	89,862	23,969	14,635	0	128,466
Other segments	0	28	86	-114	0
Total revenue	89,862	23,997	14,721	-114	128,466
EBITDA	9,735	1,851	2,362	-659	13,289
Amortisation and depreciation	1,999	856	1,356	56	4,267
Investments	2,382	176	320
Segment assets	277,310	52,365	33,590
Segment liabilities	111,036	15,454	21,600

Financial calendar

Annual General Meeting 2020 The new date for the Annual General Meeting will be announced as soon as possible.

Quirin Champions Konferenz 18 June 2020

Half-year Financial Report 2020 21 August 2020

Commerzbank Corporate Conference

2 September 2020

HAIB Stockpicker Summit 3 September 2020

Berenberg / Goldman Sachs German Corporate Conference 22 September 2020

CIC Market Solutions Forum 9-10 November 2020

Quarterly Report Q3/2020 13 November 2020

Deutsches Eigenkapitalforum 16 – 18 November 2020

End of Fiscal Year 2020

31 Dezember 2020

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