OHB SE — Interim / Quarterly Report 2013

Nov 11, 2013

Nine-month report 2013 for the period from January 1 until September 30

10% increase in total revenues to a record EUR 472.1 million

Net profit and EPS up 21% to EUR 13.3 million and EUR 0.76, respectively

Contract signed by OHB System for the next phase of the Electra satellite project

COMPANY PROFILE

The Company

OHB AG is a listed German space company with a track record in high technology spanning more than 30 years. Two business units offer customers sophisticated solutions and systems. In 2012, full-year total revenues came to EUR 633 million.

Space Systems

This business unit focuses on developing and executing space projects. In particular, it is responsible for developing and fabricating low-orbiting and geostationary small satellites for navigation, research, communications and earth observation including scientific payloads. Its manned space flight activities chiefly entail projects for the assembly and fitting of the International Space Station ISS. The exploration segment works on studies and models for exploring our solar system, primarily the moon and Mars. Reconnaissance satellites and broadband wireless transmission of image data form core technologies for security and reconnaissance.

Aerospace + Industrial Products

This segment is primarily responsible for developing and fabricating aviation and space products. It has established itself as a significant supplier of aerospace structures in the aviation and space industry. In this way, the OHB Group is the largest German supplier for the Ariane 5 program and an established producer of sensitive components for jet engines. In addition, OHB is an experienced vendor of mechatronic systems for antennas and telescopes and is involved in several major radio telescope projects. OHB telematics systems serve the logistics industry around the world by offering efficient transport management and consignment tracking facilities.

Dear shareholders, customers and, business associates,

In the third quarter of 2013, the OHB Group performed very successfully again. The award of the contract for the development and construction of the next-generation radar satellite reconnaissance system "SARah" for the German federal armed forces has laid the foundations for OHB's continued growth. Supply contracts have now also been signed with partners Astrium for the "phased-array" technology and with SpaceX for the launch services. Delays of around four months in testing of the first two Galileo* FOC satellites have pushed the planned launch back to next year. The hitherto favorable test results indicate that the quality of the satellite design and production activities should ensure smooth series assembly. The OHB Group's trail-blazing technological lead is also reflected in the development of a solely electric propulsion unit for commercial telecommunications satellites in the "Electra" project.

These advances in development work as well as the operating successes are also mirrored in our figures. The OHB Group's firm order backlog is valued at EUR 2.2 billion, underpinned in particular by the two contract awards for "SARah" and EDRS in the year to date. The EUR 43.0 million or 10% increase in total revenues in the first nine months of 2013 has also resulted in another record of EUR 472.1 million being reached, reflecting the progress made in the execution and integration of ongoing projects. On balance, net profit for the first nine months of the year rose by 21%, thus climbing more than twice as quickly as consolidated total revenues.

The Management Board expects continued growth in 2013, with the OHB Group's consolidated total revenues climbing to more than EUR 700 million, underpinned by both business units, whose total revenues will be up on 2012 levels. At over EUR 53 million and EUR 36 million respectively, EBITDA and EBIT will also be higher year on year in 2013.

Bremen, November 11, 2013 The Management Board

OHB stock

In the third quarter of 2013, the DAX hit new record highs and is still on course for reaching further peaks. The spike of 8,594 points recorded at the end of the period under review on September 30, 2013 constitutes a gain of 12.9%, while the TecDAX made even greater headway, advancing by 30.8%. This strong performance by the German benchmark index as well as many other key international indices is due to sustained accommodative monetary policies and the paltry returns on fixed-income investments. Against this background, investors again showed an appetite for risk, with this willingness to increase their exposure to equities continuing to grow.

In this environment, OHB stock also performed well, advancing by 12% in the first quarter of 2013 over the end of 2012 and thus largely tracking the TecDAX, which gained 12.5% in the same period. However, it temporarily lost its relative strength in May. As of the end of September, OHB stock had advanced by 18.2%, thus outperforming the benchmark DAX index, which climbed by only 12.9%. As of the date on which this report was completed (November 1), it was up 15.5% on the end of 2012, compared to the DAX, which was up 18.4% and falling short of the TecDAX with its outstanding gains of 36.4%.

The stock hit a high for the period of EUR 18.20 on September 12, 2013.

In the first nine months of 2013, average daily trading volumes came to 14,121 shares (Xetra plus floor trading), i.e. above the previous year's figure of 10,843.

Research Coverage

Date	Target price in EUR	Recommendation
November 1, 2013	22.00	Buy
October 7, 2013	21.00	Overweight
September 23, 2013	22.00	Buy
August 28, 2013	20.50	Buy
August 19, 2013	20.00	Buy

Treasury stock

As of September 30 of this year, OHB AG's treasury stock comprised a total of 80,496 shares, equivalent to 0.46% of its issued capital, and thus unchanged in number since December 31, 2012 as it did not purchase any treasury stock under the buy-back program in the first nine months of 2013.

Securities held by members of the Company's Management Board and Supervisory Board

September 30, 2013	Shares	Change in Q3
Christa Fuchs, Chairwoman of the Supervisory Board	1,400,690	–
Professor Heinz Stoewer, Member of the Supervisory Board	1,000	–
Marco R. Fuchs, Chairman of the Management Board	3,184,796	–
Professor Manfred Fuchs, Member of the Management Board	2,863,064	–
Ulrich Schulz, Member of the Management Board	54	–

The stock at a glance

EUR	9M/2013	9M/2012
High, Xetra	18,20	14,90
Low, Xetra	14,76	11,16
Closing price, Xetra (Ultimo)	17,910	14,680
Average daily trading volumes (Xetra + floor)	14.121	10.843
Market capitalization (Ultimo, Xetra)	312.853.599	256.431.649
Number of shares	17.468.096	17.468.096

ISIN: DE0005936124; stock market ticker: OHB; trading segment: Prime Standard

Group management report

In the first nine months of 2013, OHB AG's total revenues rose by EUR 43.0 million or 10% over the same period in the previous year to EUR 472.1 million. At EUR 272.1 million, the cost of materials climbed by 11% year on year in the first nine months of 2013. Staff costs rose by 10% to EUR 134.5 million. EBITDA was up just under 6%, rising to EUR 35.4 million in the period under review. After depreciation/ amortization, EBIT increased by a good 8% to EUR 23.9 million. Net finance expense improved again by a good 21% to EUR 3.8 million, compared with EUR 4.8 million in the same period of the previous year. All told, profit from ordinary business thus increased by a good 16% from EUR 17.3 million in the previous year to EUR 20.2 million in the period under review. After income tax expense, which rose slightly from EUR 5.7 million in the previous year to EUR 6.7 million, OHB AG earned net consolidated profit for the period of EUR 13.5 million, i.e. a good 16% up on the same period in the previous year. At EUR 13.3 million, the net profit for the period attributable to OHB's shareholders after non-controlling interests was up 21% over the same period in the previous year. Earnings per share also climbed by 21% to EUR 0.76 in the first nine months of 2013, driven for the most part by the improved profitability of the Space Systems segment in the third quarter of 2013.

Compared with the previous year, cash flow from operating activities contracted by EUR 29.4 million to a negative EUR 16.3 million due to a substantial EUR – 44.1 increase in receivables and other assets. At EUR 5.4 million, the net cash outflow from investing activities fell slightly short of the previous period (EUR – 6.2 million).

The net cash outflow of EUR 0.8 million from financing activities, down from the sharp net cash outflow of EUR 14.9 million in the previous year, was primarily due to the positive balance of new loans and loan repayments. At EUR 63.8 million at the end of the period under review, cash and cash equivalents (net of securities) were down EUR 19.4 million on the previous year's high figure.

At the end of the first nine months of 2013, the firm orders held by the OHB Group were valued at EUR 2.2 billion, thus exceeding the previous year's figure of EUR 1.7 billion by a good EUR 451 million. Of this, OHB System AG accounted for EUR 1.8 billion or around 83%. The OHB Group's firm order backlog thus stands at an unprecedented end-of-quarter figure of EUR 2.2 billion, chiefly underpinned by the award of the "SARah" contract worth EUR 0.8 billion in July 2013.

As of September 30, 2013, the OHB Group's total assets were up by 8% or EUR 43.0 million compared with December 31, 2012, rising to EUR 581.8 million. On the assets side of the balance sheet, this is chiefly due to the EUR 54.1 million increase in trade receivables as a result of ongoing progress in the completion of projects. On the other side of the balance sheet, the increase was chiefly due to current prepayments received, which rose by EUR 35.8 million over the end of 2012 due to the award of the "SARah" contract. Despite the increase in total assets, the equity ratio remained stable at 21.6% as of September 30, 2013 and was thus virtually unchanged over December 31, 2012 (21.8%).

The first two Galileo* Full Operational Capability (FOC) satellites seen together at the ESTEC Test Centre on 30 August 2013. The second flight model, FM2, is in the foreground to the left with the first, FM1, in the background to the right.

Main performance indicators of the OHB Group

EUR 000s	Q3/2013	Q3/2012	9M/2013	9M/2012
Total revenues	161,699	145,247	472,098	429,115
EBITDA	12,471	10,979	35,438	33,533
EBIT	8,613	7,098	23,941	22,146
EBT	7,364	5,482	20,164	17,338
Net profit for the period (after minorities)	4,940	3,944	13,293	10,998
Earnings per share (EUR)	0.28	0.23	0.76	0.63
Total assets as of September 30	581,785	539,122	581,785	539,122
Equity capital as of September 30	125,955	120,464	125,955	120,464
Cash flow from operating activities	–	–	– 16,303	13,126
Capital spending	1,949	1,804	6,761	7,002
Headcount as of September 30	2,457	2,455	2,457	2,455

Space Systems

In the first nine months of 2013, non-consolidated total revenues in the Space Systems business unit climbed by EUR 32.6 million or just under 12% over the year-ago period to EUR 314.0 million. This increase was due to the achievement of further project milestones in the third quarter. At the same time, the cost of materials and services purchased increased by a lower EUR 17.0 million or 9 % to EUR 198.9 million. Segment EBIT thus improved by a disproportionately strong EUR 4.3 million or 26% to EUR 20.7 million. The EBIT margin relative to non-consolidated total revenues thus widened to 6.6%, up from 5.8% in the previous year. The EBIT margin relative to the business unit's own manufacturing input expanded from 13.8% in the previous year to 15.4% in the period under review.

Contract signing in Immenstaad on September 18, 2013 (from left): Tino Zehetbauer, "SARah" project manager, OHB System AG; Evert Dudok, CEO, Astrium GmbH; Marco Fuchs, CEO, OHB System AG; Eckard Settelmeyer, site manager Immenstaad, Astrium GmbH

Kick-off meeting for the "SARah" radar satellite reconnaissance system for the German federal armed forces at OHB System AG in Bremen

OHB System AG conducted the official kick-off meeting for the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw), which has commissioned the development of "SARah", on September 3 and 4. During the meeting, BAAINBw was briefed on the current status of the overall "SARah" system, certain aspects of the programme and the industrial structures. In addition to the customer's project managers, the advisors of various national organizations also attended. As the prime contractor, OHB System AG is responsible for implementing the entire system. Moreover, it will be supplying the two reflector satellites and the main elements of the ground segment comprising the two ground stations. Under the terms of a subcontract, Astrium GmbH will be supplying the "phased-array" satellite and the related special functions for the ground segment. The contract has a total value of EUR 816 million.

Contract signed by OHB and Astrium for the delivery of the "phased-array" satellite

On September 18, 2013, OHB System AG and Astrium GmbH signed a contract for the development and assembly of the complete "phased-array" sub-system for the satellite-based radar reconnaissance system "SARah". The contract has a value of EUR 344 million.

The "SARah" system comprises three satellites and two ground stations. Two of the three satellites will be based on OHB's well-known and proven reflector technology. The "SARah" space segment will be supplemented with a third satellite, which is a further development of the "phased-array" technology developed by Astrium GmbH, which has also already proven itself in space and is currently being used on the civil satellite twins TerraSAR-X and Tandem-X.

The "phased-array" sub-system comprises phasecontrolled antennas assembled from a large number of transmitter / receiver modules which are linked and pooled with each other and are capable of being addressed in different ways. In this way, it is possible to capture a swift sequence of images of varying sizes without any mechanical movement on the part of the antenna.

As well as this, the contract includes the provision of all necessary elements for the ground segment responsible for the image request and delivery process during full operation (from the end of 2019).

Two Falcon 9 launchers to place three-satellite "SARah" constellation in orbit

Space Exploration Technologies (SpaceX) will provide the launch services for Germany's second-generation radar reconnaissance satellite system SARah. Two Falcon 9 launchers will be used to lift the satellites, which will be provided by OHB System AG and Astrium GmbH, into orbit in 2018 and 2019. These missions are vital for SpaceX as the launch contract for the threesatellite "SARah" Constellation marks SpaceX's first deal with a European government. The three-satellite constellation will be replacing the current OHB-built five-satellite SAR-Lupe constellation.

Second Galileo* FOC satellite "Milena" undergoing close examination at the ESA test center

Following assembly and successful functional testing at OHB in Bremen, the first two Galileo* FOC satellites were shipped to the ESA testing center in Noordwijk, Netherlands, in May and August of this year. There they will be undergoing environmental impact testing. The tests so far completed have all been successful. ESA is so far very satisfied with the design and quality of

Galileo* Full Operational Capability (FOC) satellite first flight model, FM1, being prepared for 'passive intermodulation testing' within the Maxwell electromagnetic test facility inside the ESTEC Test Centre at the end of August 2013.

the satellites. However, delays of around four months have arisen in connection with the preparation and execution of the thermal vacuum tests, meaning that final acceptance testing of the first two satellites can now no longer be completed in 2013. As a result of the delays, it will not be possible to launch any satellites this year.

ESA/EU have directly commissioned Arianespace with the launch of the satellites. OHB is responsible for delivery of the satellites and shipping them on the ground. ESA is directly responsible for coordinating the satellite segment, ground segment, launch vehicles and operations.

The first Galileo* Full Operational Capability (FOC) satellite beside the Phenix test chamber in the ESTEC Test Centre in October 2013, being readied for its five-week-long thermal vacuum test. Note the thermal tent visible inside the chamber, used to reproduce the temperature extremes of Earth orbit.

Second Galileo* Full Operational Capability (FOC) satellite being prepared for acoustic testing, simulating the noise of a rocket launch, inside the Large European Acoustic Facility, LEAF, of the ESTEC Test Centre in early September 2013.

OHB will complete a further 20 satellites, with ongoing execution of the contract to take another two years. OHB believes that the satellites will be delivered on time to ensure that the "Galileo* Early Services" is able to go into operation with a limited number of satellites in 2014 as planned. OHB also believes that as the contract continues the entire constellation will be completed swiftly in line with plans.

Ongoing project success by CGS in Milan

The activities connected with the OPSIS Mission Design Review (MDR) milestone have been completed and the data package was delivered to the customer ASI (Italian Space Agency) during the third quarter of 2013. The mission baseline has been studied and defined together with the detailed technological trade-offs.

The system CDR is currently being performed for the PRISMA hyperspectral program. CGS and ASI are negotiating the delta budget needed to complete the work arising from the increased complexity of the system.

CGS has been selected by the Italian Space Agency as the leading provider of the Italian contribution to the ESA Solar Orbiter mission and is delivering one of the six remote sensing instruments of the satellite, named METIS. The technical kick-off with the agency has been completed.

Further milestone passed by Kayser-Threde in the MTG (Meteosat Third Generation) project

Kayser-Threde has now completed an important milestone, thus coming a substantial step closer towards completing the design of the IRS (infrared sounder) optical instrument. The results met with a favorable response by partners OHB System, Thales Alenia Space (France) and ESA following a comprehensive preliminary design review. On this basis, the project team will be systematically working towards reaching the next milestone, namely the critical design review for the IRS in summer 2016.

In connection with the IRS, Kayser-Threde is responsible for the payload for two out of a total of six future MTG satellites for the European weather satellite organization EUMETSAT. From their geostationary orbit, the two IRS satellites will collect data on the distribution of and movements in water vapor in the earth's atmosphere and the prevailing temperature. Kayser-Threde will also be making further key contributions to the payloads for the other four MTG

New management at Kayser-Threde GmbH (from left): Ralf Paschetag (finance), Peter Hartmann (legal, human resources, communications), Dr Fritz Merkle (chairman), and Boris Penné (projects)

satellites, the imagers, for this third-generation European weather satellite constellation. In addition to permitting more precise weather forecasts, MTG will facilitate a greater understanding of the complex chemical composition of the earth's atmosphere by means of layer-for-layer analyses.

OHB reorganizing Kayser-Threde's management

Effective September 2, 2013, Dr Fritz Merkle, Peter Hartmann and Boris Penné were appointed to the management of Munich-based Kayser-Threde alongside existing management member Ralf Paschetag. Jürgen Breitkopf and Dr Clemens Kaiser have left the company's management.

With the new management team under the leadership of Dr Fritz Merkle, the company will be addressing the current challenges arising from ongoing projects – such as the next-generation European weather satellites and the EnMAP hyperspectral system – with even greater determination. At the same time, the foundations are being laid for Kayser-Threde to systematically pool its skills and capabilities with those of its affiliate OHB System. Looking ahead over the next few years, completely new facilities will be established for Kayser-Threde in Oberpfaffenhofen.

LuxSpace participating successfully in ESA studies

LuxSpace achieved further success in the completion of Phase B1 concerning AIS as part of a major ESA study. The project is to be completed in 2013, with a preliminary satellite to be commissioned at the beginning of 2014. A further two satellites are planned. In addition, LuxSpace was able to prevail over the strong competition for an ESA study on in-orbit validation.

Antwerp Space making initial forays into space flight hardware activities

Antwerp Space signed a number of Phase B study contracts which will lead to flight integration activities in the future during the third quarter of 2013. In this way, it is confirming its strategy of engaging in spaceflight related activities. Phase B study contracts have been received for the Exomars and AIS programmes. The main revenue-generating activities during the third quarter of 2013 were related to the timely and successful execution of the secure ground network and the advanced test systems contracts.

The SmallGEO Electric Propulsion Tubing System just before delivery to Bremen.

OHB Sweden

All AOCS and propulsion units for the first SmallGEO Satellite (Hispasat) have now been delivered to OHB System in Bremen. The electric propulsion tubing system, including tanks with heaters and thermistors, has also been integrated on the spacecraft in Bremen.

The follow-up order for AOCS system in the SmallGEO product line, EDRS, has been acquired and activities have now passed the preliminary design review (PDR) phase. The PDR data pack for Heinrich Hertz has also been delivered, with preparations for Phase B of the next telecom satellite, Electra, continuing. At the same time, development of AOCS and propulsion systems for the Solar Orbiter, with Astrium UK as prime contractor, is ongoing. OHB Sweden received an order for the second phase of the national Swedish InnoSat programme, a new and innovative small satellite and mission architecture for low-cost science missions, during the third quarter.

Aerospace + Industrial Products

In the first nine months of 2013, non-consolidated total revenues in the Aerospace + Industrial Products business unit climbed by EUR 8.8 million or 6% over the year-ago period to EUR 163.1 million. At the same time, the cost of materials and services purchased increased by a swifter 12% to EUR 77.2 million. As a result, segment EBIT dropped by EUR 2.5 million to EUR 3.2 million, with the EBIT margin relative to non-consolidated total revenues narrowing to 2.0%, down from 3.7% in the same period of the previous year. The EBIT margin relative to the segment's own manufacturing input came to 2.1% (previous year: 4.1%).

Prof. Manfred Fuchs represented MT Aerospace AG at the official celebrations marking the completion of the 64-meter SRT radio telescope. From left: E. Rusconi, L. Zucconi, Prof. M. Fuchs, T. Zimmerer, Dr P. Emde

Italy's largest radio telescope placed in operation Developed by MT Mechatronics and assembled at a site close to Cagliari, Sardinia, the 64-meter SRT radio telescope officially went into operation following celebrations held on September 30, 2013 and attended by over 1,200 guests from politics and business. The telescope is one of the three largest facilities in Europe and is supplementing the Very Long Baseline Interferometry Network, which observes pulsars among other things. It is fitted with the latest technology, such as an adaptive reflector surface for correcting any gravity-induced distortion.

Composite technologies

MT Aerospace developing efficient composite technologies for producing CFRP casings for future ARIANE launchers

The casings for solid-fuel propulsion units and other large structures fitted to the future ARIANE 6 launcher will not be made from metal but from carbon-fiberreinforced plastic (CFRP). MT Aerospace, Augsburg, the largest ARIANE partner in Germany and the maker of the engine casings and other large structural components for the ARIANE 5 launcher, is preparing for this new technology in a demonstration programme which has now been commenced.

Thanks to a new production method incorporating resin fusion, which no longer requires a pressurized chamber in which the material is hardened, considerable costs can be saved during the production phase. Large solid-fuel propulsion units such as those fitted to the ARIANE 5 are currently being made from steel primarily for cost factors. However, the use of composites will result in weight savings of over 40%.

The purpose of the project is to demonstrate new cost-efficient fabrication processes for engine casings made from CFRP with a capacity of some 135 tons of propellant, almost twice the size of the largest CFRP unit hitherto made in Europe, which has a capacity of only around 80 tons. The new solid-fuel engines made from CFRP are to be deployed in the future ARIANE 6, which is to go into operation from 2021 according to the resolutions of the ESA Council.

For the purposes of developing these processes, MT Aerospace has forged a strategic alliance with the DLR Center for Lightweight Production Technology in Augsburg, which can replicate industrialized production processes during the development phase thanks to its robot-based production facilities.

The industrial segment of the project is being cofinanced by the European Space Agency ESA, while the DLR Center in Augsburg is receiving funding from the Bavarian state government.

Fourth successful ARIANE 5 launch of the year

In the night of August 29/30, 2013, an ARIANE 5 ECA released two communications satellites into space: the EUTELSAT 25B/Es'hail1 for European satellite operator Eutelsat in conjunction with Es'hailSat from Qatar and the GSAT-7 for the Indian Space Research Organization ISRO.

The mission marked the 57th successful ARIANE 5 launch in a row and the 71st flight of the launch vehicle overall.

CNES updated on MT Aerospace's new tank technologies

On September 5, Michel Eymard, director of launch vehicle systems at the French space agency CNES and his team visited MT Aerospace in Augsburg. The purpose of the visit was to find out more about the technologies being developed by MT Aerospace for use in future launch vehicles systems such as the planned ARIANE 6.

Special attention was paid to the development of a dualchamber technology for upper stage tanks holding liquid hydrogen and liquid oxygen, which are separated by a newly developed sandwich tank floor. Thanks to the ultra-rigid sandwich structure, which also exhibits excellent thermal insulation properties, between the two chambers of the tank, it will be possible to use smaller tanks in the future, while propellant losses caused by vaporization will be lower during protracted free-flight phases. The payload capacity of future engine stages is to be increased by several hundreds of kilograms without sacrificing output as a result of the reduced weight of the tank system.

OHB Teledata's container tracking units undergoing testing

OHB Teledata is currently testing the final of a total of four functional software iterations for the container tracking units for Deutsche Telekom. The official release of the fourth iteration, which includes all the functions requested by the customer, is scheduled for the end of November 2013. The first roughly 200 prototypes of the container tracking unit are currently undergoing testing around the world.

Segment reporting 9-month 2013

	Space	Aerospace + Industrial
	Systems	Products	Holding	Consolidation	Total
EUR 000s	2013	2013	2013	2013	2013
Sales	304,480	155,429	0	– 4,740	455,169
of which internal sales	513	4,171	0	– 4,683	0
Total revenues	314,038	163,115	3,749	– 8,804	472,098
Cost of materials and services purchased	198,902	77,163	0	– 3,944	272,121
EBITDA	25,250	10,132	56	0	35,438
Depreciation/amortization	4,574	6,935	25	– 38	11,497
EBIT	20,676	3,197	30	38	23,941
EBIT-margin	6.6%	2.0%			5.1%
Own value creation*	133,877	151,050			284,928
EBIT-margin on own value creation	15.4%	2.1%			8.4%
EUR 000s	2012	2012	2012	2012	2012
Sales	268,358	144,345	0	– 6,379	406,324
of which internal sales	714	5,665	0	– 6,379	0
Total revenues	281,414	154,353	2,945	– 9,597	429,115
Cost of materials and services purchased	181,922	69,186	0	– 5,568	245,540
EBITDA	20,826	12,612	95	0	33,533
Depreciation/amortization	4,450	6,937	38	– 38	11,387
EBIT	16,376	5,675	57	38	22,146
EBIT-margin	5.8%	3.7%			5.2%
Own value creation*	118,618	140,219			258,837
EBIT-margin on own value creation	13.8%	4.1%			8.6%

** Total revenues minus sub-contractor deliveries

Employees

The minimal increase of 2 employees in the Group headcount over the same period of the previous year reflects the net effects of staff reductions in Aerospace&Industrial Products and new recruiting in Space Systems.

Research and development

At EUR 12.7 million in the first nine months of 2013, research and development expense was up roughly EUR 0.5 million on the year-ago figure of EUR 12.2 million.

Capital spending

Capital spending in the first nine months of 2013 stood at EUR 5.4 million, down on the year-ago figure of EUR 6.2 million.

Significant events occurring after the end of the period under review

Merger of TS S.p.A. (formerly Telematics Solutions) and CGS S.p.A

At extraordinary shareholder meetings of CGS S.p.A and TS S.p.A. on October 4, 2013, resolutions were passed approving the merger of the two companies with retroactive effect from January 1, 2013. This merger follows on from the sale of TS's ground segment activities to Vinci Energies. It does not have any effects on consolidation.

Electra contract signed

From left (first row): Martin Halliwell (SES), Magali Vaissière (ESA), Gerhard Bethscheider (SES TechCom) From left (second row): Romain Bausch (SES), Jean-Jacques Dordain (ESA), Martine Hansen (Luxembourg Minister of Research), Luc Frieden (Luxembourg Minister of Communications), Frank Negretti (OHB)

OHB System signs contract for the next phase of the Electra satellite project

OHB System AG has been awarded a contract for the development of a telecommunications satellite known as Electra which will be powered by a solely electric propulsion unit. The contract was signed in Betzdorf with satellite operator SES on October 15, 2013.

Signed in the presence of Luxembourg Minister of Communications Luc Frieden, Luxembourg Minister of Research Martine Hansen, Director General of the European Space Agency ESA Jean-Jacques Dordain, President and CEO of SES Romain Bausch, member of OHB System's management board Frank Negretti and other high-ranking representatives from politics and industry, the contract ushered in the next one-year B1 development phase of the project.

Electra is a public-private partnership under the ESA ARTES 33 program serving the purpose of providing the satellite communications industry with innovative products and systems. It is an advanced electrically powered telecommunications satellite in the sub-three-ton weight class. Such a system has previously not been available commercially in Europe. To date, electric propulsion units have been used only in research satellites or for orbit maintenance for telecommunications satellites. Artemis, a communications satellite operated by ESA, successfully tested the concept of using solely electric propulsion units to achieve a geostationary orbit for the first time. The results showed that electric propulsion units reduce propellant mass requirements by up to 90 percent compared with chemical propulsion units. Consequently, it is possible to cut the launch mass of the satellite by almost half. Electra is now to be used to systematically broaden the scope for implementing this technology in a specially designed satellite system. The project initially entails the platform development which in a further step will lead to a joint mission with industrial project partner SES. As one of the world's largest satellite operators, this company has a keen interest in encouraging competition in the selection of launch vehicles in order to achieve additional savings.

With this contract, OHB System is tapping a substantially larger area of business in commercial telecommunications and adding an innovative new propulsion unit design to its SmallGEO range.

Galileo* Full Operational Capability Flight Model 2, FM2, satellite's main L-band antenna used for broadcasting navigation messages, seen during preparation for a mass property test at the ESTEC Test Centre at the end of August 2013.

Opportunity and risk report

The risk report included in the annual report for 2012 describes in detail the risks to the Company's business performance. There were no material changes in the OHB Group's risk profile in the period under review.

Outlook for the Group as a whole in 2013

The Management Board expects continued growth in 2013, with the OHB Group's consolidated total revenues climbing to more than EUR 700 million, underpinned by both business units, whose total revenues will be up on 2012 levels. At over EUR 53 million and EUR 36 million respectively, EBITDA and EBIT will also be higher year on year in 2013. It should be expressly noted in connection with forward-looking statements that actual events may differ materially from expectations of future performance.

consolidated financial statements

Consolidated IFRS income statement

EUR 000s	Q3/2013	Q3/2012	9M/2013	9M/2012
1. Sales	162,207	139,960	455,169	406,324
2. Increase/decrease in inventories of finished goods and work in progress	– 6,004	1,898	4,133	9,663
3. Other own work capitalized	3,894	2,161	8,628	6,642
4. Other operating income	1,602	1,228	4,168	6,486
5. Total revenues	161,699	145,247	472,098	429,115
6. Cost of materials	93,319	84,745	272,121	245,540
7. Staff costs	45,605	40,277	134,479	122,162
8. Depreciation/amortization	3,858	3,881	11,497	11,387
9. Other operating expenses	10,304	9,246	30,060	27,880
10. Earnings before interest and taxes (EBIT)	8,613	7,098	23,941	22,146
11. Other interest and similar income	387	214	687	851
12. Other financial expenses	1,701	1,834	4,586	5,490
13. Currency translation gains /losses	65	4	122	-169
14. Net profit/loss from shares carried at equity	0	0	0	0
15. Investment income	0	0	0	0
16. Net finance expense	– 1,249	-1,616	-3,777	-4,808
17. Earnings before taxes	7,364	5,482	20,164	17,338
18. Income taxes	2,576	1,477	6,668	5,749
19. Consolidated net profit for period	4,788	4,005	13,496	11,589
20. Minority interests	152	-61	-203	-591
21. Consolidated net profit after minority interests	4,940	3,944	13,293	10,998
22. Consolidated net profit brought forward	83,892	74,188	75,539	67,134
23. Additions to share premium	0	0	0	0
24. Consolidated net profit	88,832	78,132	88,832	78,132
25. Number of shares	17,387,600	17,387,600	17,387,600	17,387,600
26. Earnings per share (basic in EUR)	0.28	0.23	0.76	0.63
27. Earnings per share (diluted in EUR)	0.28	0.23	0.76	0.63

IFRS statement of comprehensive income

EUR 000s	Q3/2013	Q3/2012	9M/2013	9M/2012
Consolidated net profit for period	4,788	4,005	13,496	11,589
Exchange differences on translation foreign operations	16	30	– 60	48
Net gains /losses from the measurement of financial assets recorded under equity	969	704	1,998	1,331
Cash Flow Hedges
Recycling	0	0	– 40	0
Gains arising during the year	0	– 43	0	31
Actuarial gains /losses*	– 235	– 39	– 313	– 1,187
Other comprehensive income after tax	750	651	1,585	222
Comprehensive income	5,538	4,656	15,081	11,811
Of which attributable to
equity holders of OHB AG	5,690	4,595	14,878	11,220
other equity holders	– 152	61	203	591

* The previous year's figures have been adjusted due to the retroactive application of IAS 19 (2011)

OHB AG | 9-month report 2013

IFRS consolidated cash flow statement

EUR 000s	9M/2013	9M/2012
Earnings before interest and taxes (EBIT)*	23,941	22,146
Non-cash income from first-time consolidation	0	– 184
Income taxes paid	– 6,832	– 2,361
Other non-cash expenses (+)/income (–)	0	0
Depreciation/amortization	11,497	11,387
Changes in pension provisions	305	532
Gross cash flow	28,911	31,520
Increase (–)/decrease (+) in own work capitalized	– 8,576	– 4,801
Increase (–)/decrease (+) in inventories	– 7,372	– 9,882
Increase (–)/decrease (+) in receivables and other assets*	– 53,036	– 8,907
Increase (+)/decrease (–) in liabilities and current provisions	– 891	– 27,751
Increase (+)/decrease (–) in prepayments received	24,665	32,775
Gains (–)/loss (+) from the disposal of non-current assets	– 4	172
Cash outflow/ inflow from operating activities	– 16,303	13,126
Payments made for investments in non-current assets	– 6,761	– 7,002
Payments received from the acquisition of consolidated companies	0	0
Payments received from disposals of non-current assets	728	57
Interest and other investment income	627	788
Payments received/made in connection with items not allocated to operating or financing activities	0	0
Cash outflow from investing activities	– 5,406	– 6,157
Dividend payment	– 6,452	– 6,086
Changes in reserves	0	0
Payments received/made for other financial investments	0	0
Payments made for the settlement of financial liabilities	– 12,753	– 11,479
Payments received from raising borrowings	23,013	8,179
Acquisition of treasury stock	0	0
Minority interests	– 35	– 24
Interest and other finance expense	– 4,586	– 5,490
Cash outflow from financing activities	– 813	– 14,900
Cash changes to cash and cash equivalents	– 22,522	– 7,931
Consolidation-related changes to cash and cash equivalents	0	0
Currency-translation-related changes to cash and cash equivalents	61	– 93
Cash and cash equivalents at the beginning of the period	86,236	91,194
Cash and cash equivalents at the end of the period	63,775	83,170

Cash and cash equivalents including securities and current financial investments

January 1	95,415	99,778
Changes in cash and cash equivalents at the end of the period and current financial instruments	– 26,650	– 7,931
September 30	68,765	91,847

* The previous year's figures have been adjusted due to the retroactive application of IAS 19 (2011)

IFRS consolidated balance sheet

EUR 000s	09/30/2013	12/31/2012
Assets
Goodwill	7,687	7,687
Other intangible assets	40,517	36,324
Property, plant and equipment	69,183	70,776
Shares carried at equity	1,259	1,259
Other financial assets	20,498	17,966
Non-current assets	139,144	134,012
Other non-current receivables and assets*	1,939	2,498
Securities	1,611	5,418
Deferred income taxes*	9,127	8,850
Other non-current assets	12,677	16,766
Non-current assets	151,821	150,778
Inventories	89,780	82,408
Trade receivables	253,311	199,234
Other tax receivables	1,409	1,744
Other non-financial assets	18,310	14,596
Securities	3,379	3,762
Cash and cash equivalents	63,775	86,236
Current assets	429,964	387,980
Total assets	581,785	538,758

Shareholders' equity and liabilities

Subscribed capital	17,468	17,468
Additional paid-in capital	15,094	15,094
Retained earnings	521	521
Other comprehensive income*	– 4,502	– 6,234
Treasury stock	– 781	– 781
Consolidated profit*	88,832	81,991
Shareholders' equity excluding minority interests	116,632	108,059
Minority interests*	9,323	9,299
Shareholders' equity	125,955	117,358
Provisions for pensions and similar obligations*	93,609	92,811
Non-current other provisions	7,965	3,419
Non-current financial liabilities	45,477	43,784
Non-current advance payments received on orders	21,208	32,316
Deferred income tax liabilities*	16,328	14,389
Non-current liabilities and provisions	184,587	186,719
Current provisions	26,476	19,519
Current financial liabilities	30,056	21,488
Trade payables	84,570	98,500
Current prepayments received on orders	113,840	78,068
Tax liabilities	4,670	7,011
Current other liabilities	11,631	10,095
Current liabilities	271,243	234,681
Total equity and liabilities	581,785	538,758

* The previous year's figures have been adjusted due to the retroactive application of IAS 19 (2011)

IFRS consolidated statement of changes in equity

EUR 000s Balance on January 1, 2012	Sub scribed capital 17,468	Additional paid-in capital 15,094	Retained earnings 520	Other compre hensive income – 2,276	Consoli dated profit 73,220	Treasury stock – 781	Share holders' equity excluding minority interests 103,245	Minority interests 10,278	Share holders' equity 113,523
Dividend payment	0	0	0	0	– 6,086	0	– 6,086	0	– 6,086
Comprehensive income*	0	0	0	81	10,998	0	11,079	444	11,523
Other changes	0	0	1	0	0	0	1	0	1
Balance on Sep 30, 2012*	17,468	15,094	521	– 2,195	78,132	– 781	108,239	10,722	118,961
Balance on Dec 31, 2012*	17,468	15,094	521	– 6,234	81,991	– 781	108,059	9,299	117,358
Dividend payment	0	0	0	0	– 6,452	0	– 6,452	0	– 6,452
Comprehensive income	0	0	0	1,732	13,293	0	15,025	24	15,049
Other changes	0	0	0	0	0	0	0	0	0
Balance on Sep 30, 2013	17,468	15,094	521	– 4,502	88,832	– 781	116,632	9,323	125,955

* The previous year's figures have been adjusted due to the retroactive application of IAS 19 (2011)

Notes

General information on the nine-month report

OHB AG is a listed stock corporation domiciled in Germany. The consolidated financial statements for the interim report on OHB AG and its subsidiaries (the "Group") for the first nine months of 2013 were approved for publication in a resolution passed by the Management Board on November 11, 2013.

OHB AG's interim consolidated financial statements include the following companies:

• OHB System AG, Bremen
• STS Systemtechnik Schwerin GmbH, Schwerin
• KT Beteiligungs GmbH & Co. KG, Bremen
• Kayser-Threde GmbH, Munich
• CGS S.p.A. (I)
• OHB Sweden AB, Stockholm (S)
• Antwerp Space N.V., Antwerp (B)
• LUXSPACE Sàrl, Betzdorf (L)
• MT Aerospace Holding GmbH, Bremen
• MT Aerospace AG, Augsburg
• MT Aerospace Grundstücks GmbH & Co. KG, Munich
• MT Mechatronics GmbH, Mainz
• MT Aerospace Guyane S.A.S., Kourou (GUF)
• Aerotech Peissenberg GmbH & Co. KG, Peissenberg
• OHB Teledata GmbH, Bremen
• megatel Informations- und Kommunikationssysteme GmbH, Bremen
• Timtec Teldatrans GmbH, Bremen
• TS S.p.A., Milan (I)
• ORBCOMM Deutschland AG, Bremen

The results of the non-consolidated affiliated companies are not included in the interim reports.

Basis for reporting

These unaudited interim consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the related interpretations of the International Accounting Standards Board (IASB) applicable to interim reporting as endorsed by the European Union and the additional provisions of commercial law to be applied in accordance with Section 315 a (1) of the German Commercial Code. Accordingly, this interim report does not include all the information or notes required by IFRS for the consolidated financial statements to be prepared for a full year.

The Management Board takes the view that these unaudited interim consolidated financial statements contain all adjustments needed to provide a true and fair view of the Company's net assets, financial position and results of operations. The results derived in the period ending September 30, 2013 are not necessarily a guide to the Company's future performance.

In connection with the preparation of the interim consolidated financial statements in accordance with IAS 34 "Interim Financial Reporting", the Management Board is required to make certain assessments and estimates as well as assumptions influencing the application of the accounting principles within the Group and the recognition of assets and liabilities as well as income and expenses. The actual amounts may vary from such estimates and adjustments.

The recognition and measurement methods used in the interim consolidated financial statements match those applied to the consolidated financial statements as of the end of the last financial year with the expection of first-time application of IAS 19 (2011).

Income taxes are calculated on the basis of a tax rate of around 32%.

There have been no material changes in the basis underlying the estimates applied since the annual report for 2012. A detailed description of the accounting principles can be found in the notes to the consolidated financial statements included in the annual report for 2012.

First-time application of accounting standards

OHB has been applying the revised accounting standard IAS 19 since January 1, 2013. This has resulted in the following material effects on the consolidated financial statements: Income from plan assets recorded through profit and loss is recognized on the basis of the interest rate used to calculate pension obligations. Actuarial gains and losses are recorded within other comprehensive income immediately upon arising. The revised guidance also provides for immediate recognition of changes in defined benefit obligations and the fair value of the plan assets as soon as they arise. The corridor approach previously stipulated in IAS 19 has been abolished.

The standard has been applied with retroactive effect, resulting in the following adjustments to the opening balance sheet as of January 1, 2012 and the prior periods shown.

Balance sheet

	01/01/2012			09/30/2012			12/31/2012
EUR 000s	before adjust ment	adjust ment	after adjust ment	before adjust ment	adjust ment	after adjust ment	before adjust ment	adjust ment	after adjust ment
Total assets	528,239	248	528,487	539,122	613	539,735	535,704	3,054	538,758
Total equity	113,577	248	113,825	120,464	– 1,503	118,961	124,763	– 7,405	117,358
Total liabilities	414,662	0	414,662	418,658	2,116	420,774	410,941	10,459	421,400

Audit review

This interim report has not been audited or reviewed by a statutory auditor in accordance with Section 317 of the German Commercial Code.

Responsibility statement issued by management in accordance with Section 37y of the German Securities Trading Act in conjunction with Section 37w (2) No. 3 of the German Securities Trading Act:

"To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group 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 for the remaining months of the financial year."

Bremen, November 11, 2013 The Management Board

Marco Fuchs Chairman of the Management Board

Prof. Manfred Fuchs Member of the Management Board

Ulrich Schulz

Member of the Management Board

CALENDAR OF EVENTS 2013

Analyst and investor conference, German Equity Forum, Frankfurt/Main	November 12, 2013
Capital Market Day, Bremen	February 13, 2014
Annual report/Annual press conference, Bremen	March 20, 2014
Analyst and investor conference, Frankfurt/Main	March 20, 2014
Three-month report and conference call	May 14, 2014
Annual General Meeting, Bremen	May 22, 2014
Six-month report and conference call	August 13, 2014
Nine-month report and conference call	November 12, 2014

Credits Page 07: ESA-Anneke Le Floc'h Page 08: Astrium GmbH Page 09: ESA-Anneke Le Floc'h Page 10: ESA-Anneke Le Floc'h Page 11: OHB AG Page 12: OHB Sweden AB Page 13: MT Mechatronics GmbH Page 14: MT Aerospace AG Page 17: ESA Page 18: ESA-Anneke Le Floc'h

*The FOC (full operational capability) phase of the Galileo program is being funded and executed by the European Union. The European Commission and the European Space Agency ESA have signed a contract under which ESA acts as the development and sourcing agency on behalf of the Commission. The view expressed here does not necessary reflect the official position of the European Union and/or ESA. "Galileo" is a registered trademark owned by the EU and ESA and registered under OHIM application number 002742237.

OHB – Official partner to Werder Bremen

OHB AG

More information available from: Martina Lilienthal Investor Relations Karl-Ferdinand-Braun-Str. 8 28359 Bremen, Germany

Phone +49 (0)421 2020-720 Fax +49 (0)421 2020-613 ir@ohb.de

This nine-month interim report and further information are available on our website at: www.ohb.de