group financial report 9m 2008 - vbh holding · 02 group financial report 9m 2008 group financial...

Group Financial Report 9M 2008VBH Holding AG – 9 months 2008

02 Group Financial Report 9M 2008

Group Financial Report 9M 2008

Sales rose by 8.0% to Euro 649.8 million.

EBT at Euro 26.5 million is nearly at the level of the previous year.

Earnings per share (EPS) declined from Euro 0.49 to Euro 0.42 due

to conversion of profit sharing rights.

Equity ratio increased to 35.0%.

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Korntal-Münchingen

04 – 06 Executive Board

04 Letter to the shareholders

07 – 24 Group Financial Report 9M 2008

07 Group Interim Report

08 Overview of the VBH-Group

09 Business development, sales proceeds and earnings

12 Convertible Profit Sharing Rights and Equity

12 The VBH Share

13 Chances and risks

14 Outlook 2008

Group interim financial statement

15 Group interim financial statement

16 Group profit and loss account

17 Group balance sheet

18 Group Cash-Flow statement

19 Consolidated Statements of Stockholders’ Equity

20 Group Segment Reporting

21 Explanatory Notes

24 Declaration pursuant to § 37y No. 1 Securities Trading Act

25 – 27 Further Information

26 Financial calendar

27 Contacts

27 Disclaimer

Inhalt Group Financial Report 9M 2008 03

Contents

Dear Shareholders,This interim report will inform you about the figures and business development of the VBH Group in the first nine months of the financial year 2008. In the last three months, the business momentum of VBH weakened as a result of the impact of the financial crisis. According to many experts, the crisis of confidence among banks is now affecting the economy as a whole. This downturn has continued at an unexpectedly rapid rate and is having a negative impact on economic development worldwide. VBH was unable to escape these market trends completely, but remains on a good growth path.

Sales of the VBH Group rose over the reporting period by 8.0%, from Euro 601.8 million in the previous year to Euro 649.8 million. This includes the newly acquired subsidiaries VBH Hody in Belgium and Fercom Srl in Italy, which contributed to this increase with sales of Euro 18.8 million. The purely organic growth of the VBH Group is currently 4.9%.

The German segment showed excellent development in the reporting period, with an accumulated sales increase of 6.4% compared to the previous year. In international business, sales expectations were not fulfilled in some cases due to the difficult situation in various markets. However, percentage sales growth in Eastern Europe remained nearly in double-digit figures.

The Group’s EBT decreased compared to the previous year from Euro 27.1 million to Euro 26.5 million despite declining operating interest expenditure. Fully diluted earnings per share (EPS) decreased from Euro 0.49 to Euro 0.42 due to the partial conversion of profit sharing rights and a shortfall in deferred tax revenues.

As a result of the financial market crisis impacting the real economy, with the recent publication of preliminary interim figures, the Executive Board has adjusted the sales forecast for the current financial year to between Euro 870 million and Euro 880 million, and the EBIT forecast to between Euro 39 and Euro 41 million. As a result, according to current knowledge, earnings per share will be between Euro 0.62 and Euro 0.65 (previous year: Euro 0.67). Irrespective of the current turbulence on the market, the Executive Board is maintaining its medium term growth targets. VBH will be able to hold its own and grow with a focus on earnings in a difficult market environment. In order to achieve this, our available potential must be used consistently. The key factors here are a newly developed own brand concept, further optimisation of our international product line and expansion into regions with high growth potential.

Executive board Group Financial Report 9M 2008 05

Dr. Ralf Lieb Rainer Hribar

With effect from 28 August 2008, VBH shares were listed in the Prime Standard of Deutsche Börse. The Executive Board considers implementation of a shareholder-friendly dividend policy another factor in affording greater importance to shareholder interests. As a result, the Executive Board decided to propose to the Supervisory Board that the distribution ratio for the 2008 financial year will be raised to 35.0% of earnings per share. On the basis of the present forecast, this would result in a proposed dividend of Euro 0.22 to Euro 0.23 per share.

At this point, we would like to thank all our shareholders for their confidence and trust in our company and in our work, even in these difficult times. Our objective remains to move forward with the internationalisation of VBH and to strengthen and expand the market position of VBH. In the light of varied discussions about future economic development, the Executive Board will also engage intensively with the scenario of worldwide recession and its impact on the VBH business model, in order to withstand strong market turbulence, and particularly to use the business chances which could arise from this. We will continue to direct our thinking and actions towards the vision of successfully establishing our green logo in our industry worldwide and providing added value to our shareholders.

Yours sincerely

Rainer Hribar Dr. Ralf LiebChairman of the Board of Directors Member of the Board of Directors

06 Group Financial Report 9M 2008 Executive board

Group Interim Report

Executive board and regional managers worldwidetv.l.n.r. José Manuel Madrazo-Serna (Spain/Middle and South America), Valerij Bezrukov (Russia), Rainer Hribar (CEO), Indrek Sauga (GUS without Russia), Andrzej Wyszogrodzki (Centrall/Eastern Europe), Andre Geffke (Asia-Pacific/Middle East), Hans Wiedemann (South/Western Europe), Dr. Ralf Lieb (CFO).

Overview of the VBH group *

* The figures for the company were determined on the basis of the rendering of accounts in accordance with IFRS.

** All figures fully diluted.

*** Free Cash Flow = + CF operating activities + CF from investment activities - paid interests

In Euro m 30.09.08 +/- in% 30.09.07

Sales 649.8 8.0 601.8

Earnings before interests and taxes (EBIT)

32.0 -13.3 36.9

Earnings before taxes (EBT) 26.5 -2.2 27.1

EPS in Euro** 0.42 -14.3 0.49

FCF*** -30.3 - -3.3

Nr. of employees 2,858 5.1 2,720

08 Group Financial Report 9M 2008 Group Interim Report

VBH Group

In the first nine months of 2008, VBH increased its Group sales

by 8.0% year-on-year to Euro 649.8 million. The Group’s organic

growth rate increased by 4.9% over the same period. During the

reporting period, there were changes to the consolidated Group

compared to the previous year, with the consolidation of VBH

Hody in Belgium and Fercom Srl in Italy and the acquisition of

minority holdings in Bosnia. Sales momentum weakened slightly

compared to the previous reporting period.

EBIT fell from Euro 36.9 million in the previous year to Euro 32.0

million (-13.3%). The EBIT margin is currently 4.9% compared to

6.1% in the previous year. The decline in EBIT was due largely to

one-off expenses resulting from the restructuring of warehouse

sites in Italy, but also to increasing sales and currency losses in

Great Britain and unexpected pressure on margins in Eastern

Europe. As a result of consolidation effects, human resources

expenses have risen significantly in our Russian businesses.

Over the reporting season, EBT declined by 2.2% to Euro

26.5 million compared to Euro 27.1 million in the previous

year, despite lower operating interest expenditure after partial

conversion of profit sharing rights in early 2008.

Fully diluted earnings per share (EPS) declined by 14.3% from

Euro 0.49 in the previous year to Euro 0.42. Basic earnings

per share declined by 27.6% from Euro 0.58 to Euro 0.42. The

decline in EPS was due to an shortfall in deferred tax revenues,

which had reduced expenses for income taxes in the previous

year.

As a result of the expansion of business activities and of the

consolidated Group, the balance sheet total increased by Euro

52.8 million to Euro 434.3 million.

Short term assets, principally stocks, receivables and other asset

values, increased by Euro 39.8 million to Euro 337.4 million,

from Euro 297.6 million in the previous year. As at 30 September

2008, liquid funds increased by Euro 0.9 million to Euro 12.7

million compared to the previous year’s reporting date.

Short term debts, primarily trade accounts payable, and bank

liabilities increased significantly by Euro 10.3 million, from Euro

144.3 million in the previous year to Euro 154.6 million.

Cash flow from operational activities fell from Euro 10.9 million

to Euro -8.6 million. Free cash flow decreased from Euro -3.3

million to Euro -30.3 million. This is due largely to the Belgian

acquisition of Hody and the increase in working capital.

Long-term debts decreased from Euro 131.9 million to Euro

127.8 million. Long-term financial debts raised from Euro

76.4 million to Euro 98.3 million. However, the extraordinary

termination of profit sharing rights with duration until 2014 due

to the legal corporate tax reform had a positive impact. In the

current financial year, this resulted in profit sharing rights of Euro

26.7 million being converted to 5.3 million shares. The remaining

profit sharing rights totalling Euro 8.2 million remain subject to

interest until 2009 and must be paid back by the end of the

2009.

Net debts increased over the reporting period from Euro 130.9

million to Euro 133.1 million. Compared to the reporting date of

31 December 2007, net debts increased by Euro 14.9 million,

despite the conversion of profit sharing rights. This is due to the

acquisition of VBH Hody in Belgium and the seasonal increase

in working capital. Inventories were again built up in the lead-up

to the inflation surcharges applied by the industry for materials

on 1 September 2008. However, inventories will be significantly

reduced by the end of the year. The objective of reducing net

debts to approximately Euro 100 million by the end of the year is

being maintained.

As a result of the conversion of the profit sharing rights and

the management exercising option rights, the equity of VBH

increased by Euro 28.3 million. In addition, transfers to retained

earnings and the positive earnings development, in consideration

of dividend payment, over the reporting period caused equity

to increase by a total of Euro 18.3 million. As a result, equity

increased from Euro 105.3 million in the previous year to the

current level of Euro 151.9 million. As at 30 September 2008,

the Group’s equity ratio totalled 35.0% (previous year: 27.6%).

Business development, sales proceeds and earnings

Group Interim Report Group Financial Report 9M 2008 09

As at 30 June 2008, the number of outstanding shares was

45,790,408.

In this reporting period, investments in fixed assets were primarily

directed towards replacement requirements. A total of Euro 8.1

million was invested in tangible assets. Long-term assets rose by

a total of Euro 13.1 million to Euro 96.9 million.

The number of employees increased from 2,720 to 2,858. The

steep increase in the number of employees is largely the result of

consolidation effects in our Russian business.

Segment Germany

As the headquarters of the VBH Group, Germany is the region

with the highest contribution to sales. The Germany segment

comprises the business activities of VBH Deutschland GmbH

and esco Metallbausysteme GmbH. In the first nine months of

the year, the company generated sales of Euro 288.7 million

here. Overall, sales increased again significantly by 6.4%.

Business activities in Germany were influenced positively

by increased refurbishment activities by private house and

apartment owners. The state incentives in the refurbishment

industry currently under discussion, and the “flight” into real

assets caused by the financial crisis – understood here as

increased expenditure on the refurbishment of own properties

- are expected to result in a certain stability in the German

market even in 2009.

EBIT for the Germany segment rose in the first nine months

by 18.2% to Euro 9.1 million (previous year: Euro 7.7 million).

This corresponds to an increased EBIT margin of 0.4

percentage points to 3.2%.

Segment Western Europe

Sales generated at companies in Western Europe increased

by 10.1% to Euro 138.6 million in the reporting period. VBH

Hody in Belgium and Fercom Srl in Italy were consolidated in

this segment for the first time and contributed to the increase

in sales with Euro 18.8 million. Sales declined organically by

Euro 6.1 million.

VBH Galro, acquired last year, is asserting itself well in the

difficult Irish market and posted double-digit growth. Declining

sales were posted by our companies in Spain and Great

Britain, which were unable to distance themselves from the

turbulence on their respective property markets. In the past

months, the situation in our Spanish subsidiary has stabilised,

whereas the downward momentum in Great Britain has

accelerated. Overall, the other companies in the region are

maintaining sales at the level of the previous year. Although

market conditions in Western Europe are not expected to

improve in 2009, at least a stabilisation of the critical British

and Spanish markets is expected.

EBIT for the companies in Western Europe fell from Euro 10.6

million to Euro 7.5 million (EBIT margin: 5.4%; previous year:

8.4%). This was primarily negatively affected by declining

earnings in Italy in addition to declining earnings in Spain and

Great Britain brought about by market forces. Restructuring in

Italy will be completed by the end of 2008.

Segment Eastern Europe

The Segment Eastern Europe is the region which made the

second highest contribution to sales, generating Euro 230.5

million. Sales in this region continued to show strong growth

in the past nine months, increasing by 9.5%.

Contrary to expectations, the spread of the financial crisis

across the economy has been reflected very quickly on

the markets in Eastern Europe. Our companies in the

Baltic region were unable to escape the negative market

conditions and posted double-digit declines in sales. In

the well-established Central Eastern European markets

(Poland, the Czech Republic and Hungary), sales increases

weakened slightly in comparison to the first six months. In

Russia, Belarus and the Ukraine, sales continued to show

double-digit growth. However, the gross income margin came

under pressure. The regional companies in the Balkan region


developed very successfully, with year-on-year sales growth

of 21.0%. In view of the current market turbulence, at present

it is very difficult to make forecasts for the Eastern European

markets with any degree of certainty. However, we are

assuming that the demand for refurbishment in the CIS states

will still lead to high and sustainable growth rates, even if the

2009 financial year could still be negatively influenced by the

effects of the financial crisis.

EBIT fell by Euro 2.4 million to Euro 18.9 million as a result

of higher raw material prices. As a result, the EBIT margin

declined from 10.1% in the previous year to the present level

of 8.2%.

Segment Other Markets

The activities in Asia (Singapore, Shanghai and Beijing)

and in the Middle East (Dubai) represent a long-term future

investment with high sustainable potential for VBH. These

markets are controlled and further countries launched

successively through our head office in Singapore. The

discussion concerning climate changes and energy benefits

of new window technologies are also showing early

successes here. In view of the market potential available, we

believe that even the current problems on the market will not

negatively affect the potential for development in our Asian

business.

VBH generated sales of Euro 9.3 million in this segment in the

reporting period against Euro 4.4 million in the previous year.

EBIT amounted to Euro 0.1 million, making a positive earnings

contribution to the consolidated earnings from this segment

(previous year: Euro -0.6 million).

Segment Corporate Services

The activities of VBH Holding AG and of one leasing

special purpose entity, which are combined in the Segment

Corporate Services, developed as planned in terms of costs.

EBIT fell from Euro -2.2 million to Euro -3.5 million.


The convertible profit sharing rights of Euro 50 million, which

were issued in 2004, include an option to convert them

into VBH shares at a ratio of 5:1. A total of 15.1 million

options were converted during the annual exercising period

2007 into 3.0 million VBH individual shares. Following the

extraordinary termination of the convertible bond, Euro 26.7

million profit sharing capital was converted into 5.3 million

VBH shares in 2008. The residual outstanding convertible

profit sharing rights of Euro 8.2 million are to be repaid

at the end of 2009. The capital stock of VBH Holding AG

amounts to Euro 45.79 million as at 30 September 2008.

The executives of VBH converted options from the current

stock option plan. This resulted in an additional increase of

Euro 580,000 in capital stock.

The global financial crisis and higher raw material prices

led to significant share price declines across all important

international financial centres in the first nine months of this

year. Furthermore, the predicted downturn in economic

growth will have a negative impact on share prices.

VBH shares suffered just as other small cap and building

stocks due to an initial fall in price from the beginning of the

year until the middle of February 2008 and subsequently

recovered again gradually, achieving the value held at

the beginning of the year at the beginning of June 2008.

However, as the financial market crisis continued, the share

was affected by the downhill slide on the share markets and

declined to Euro 3.88 as at the 30 September 2008 reporting

date. Although the VBH share moved in step with the

comparable index SDAX throughout the course of the year, a

fall in price of approximately 35% is still very concerning. The

highest closing price was Euro 6.10 on 30 May 2008 and the

lowest price was Euro 3.51 on 29 September 2008. Various

analysts continue to assess the VBH share as undervalued

despite adjusted measurement parameters.


Convertible Profit SharingRights and Equity Capital

Development ofthe VBH Share

S hare price performances in 2008

Index (01.01.2008 = 100)

100

DAX SDAX VBH Aktie

Januar 08 September 0850


The uncertainty currently dominating the markets makes it

difficult to forecast with any degree of certainty. However,

the Executive Board believes that, during the last nine

months, the changes to the medium-term prospects for

the development of the global economy have not been

as drastic as the media have reported. Furthermore, in

comparison to the long-term high average price for energy,

growing awareness of the population concerning the issue

of climate change, discussed incentives for investments in

the field of refurbishment and the introduction of the energy

pass for residential buildings in Germany mean that the VBH

can continue to be optimistic about the future. Against this

backdrop, VBH anticipates the market situation in Germany

and Western Europe will stabilise at the present level, whereas

further growth potential is perceived for Eastern Europe

and Asia. The growth of VBH is supported by selective

acquisitions, further expansion of the market position into

existing markets and expansion into markets with high growth

potential.

Despite this restrained optimism, we should not rule out the

fact that the current crisis in sentiment will lead to a longer

lasting economic crisis on a global basis. For this reason, the

Executive Board will also provide a worst case scenario in

its plans which will take into consideration the effects of this

development – which from today’s perspective are unlikely.

We want to be prepared in order to be able to generate

above-average results even in unfavourable circumstances.

The experiences of VBH after the turn of the millennium are

helping in the accomplishment of this challenge.

The risk estimate was updated for the current financial report.

With the exception of the economic risks already discussed,

there were no substantial changes in the risk situation of

the VBH Group compared with the risks expressed in the

Corporate Governance Report in the Annual Report 2007.

Therefore, it is assumed that these will also continue to exist

over the course of 2008 without significant changes.

Chances andRisks

As it has been already communicated with preliminary interim

business figures for the current reporting period, the Executive

Board is expecting sales of between Euro 870 million and

Euro 880 million (previous year: Euro 808.4 million) and EBIT

of between Euro 46 and Euro 48 million (previous year: Euro

49.4 million) for the current financial year. This results in an

EBT of Euro 39 and Euro 41 million (previous year: Euro 38.2

million) and earnings per share of between Euro 0.62 and

Euro 0.65 (previous year: Euro 0.67).

VBH is in a good strategic position in its already established

markets, will continue to invest in growth markets and will

continue to expand its strong market position as a market

leader in the fittings industry in Europe. The development of

our own brands, the further optimisation of our product range

and selective acquisitions will help to achieve our growth

targets. For this reason, the Executive Board is optimistic

about the future despite the current crisis. The green VBH

logo will be established on the market worldwide.

Korntal-Münchingen, November 2008

VBH Holding Aktiengesellschaft

Executive Board


Outlook 2008

Group interim financial statement

16 Group Financial Report 9M 2008 Group interim financial statement

Group Profit and Loss AccountGroup Profit and Loss Account as of 30. September 2008 according IFRS

30.09.2008in Euro k

30.09.2007in Euro k

Change y/y

1. Consolidated sales 649,804 601,765 8,0%

2. Change in inventories of finished goods and work in progress 0 0

3. Other operating income 10,513 11,953 -12,0%

4. Total operating performance 660,317 613,719 7,6%

5. Cost of materials -493,063 -458,356 7,6%

6. Personnel expenses -71,073 -61,840 14,9%

7. Other operating expenses -59,842 -52,744 13,5%

8. Earnings before interest, taxes anddepreciation (EBITDA) 36,340 40,778 -10,9%

9. Depreciation -4,363 -3,916 11,4%

10. Earnings before interestand taxes (EBIT) 31,977 36,862 -13,3%

11. Income from participations 0 1 -100,0%

12. Interests and similar income 620 458 35,1%

13. Write-off financial assets and securitiesand bonds 0 0

14. Interests and similar expenses -6,076 -10,196 -40,4%

15. Expenses from transfer of losses 0 0

16. Financial result -5,456 -9,736 -44,0%

17. Earnings before taxes (EBT) 26,521 27,126 -2,2%

18. Income tax -6,221 -6,757 -7,9%

19. Deffered taxes -36 3,821 -100,9%

20. Earnings after taxes (EAT) 20,264 24,190 -16,2%

Other shareholders proportion in EAT 2.087 2.485

VBH shareholders proportion in EAT 18.177 21.705

Earnings per share in Euro – fully diluted – 0.42 0.49

Earnings per share in Euro – undiluted – 0.42 0.58

Group interim financial statement Group Financial Report 9M 2008 17

Group Balance-Sheet Group Balance-Sheet at 30. September 2008 according IFRS

Assets 30.09.2008in Euro k

31.12.2007in Euro k

30.09.2007in Euro k

A. LONG-TERM ASSETS

I. Intangible assets 47,753 39,739 38,467

II. Tangible assets 35,927 33,943 33,543

III. Financial assets 1,422 689 454

IV. Other long-term assets 11,879 12,476 11,386

LONG-TERM ASSETS 96,981 86,847 83,849

B. SHORT-TERM ASSETS

I. Inventories 157,459 128,344 130,658

II. Receivables and other assets short-term 165,624 128,088 152,735

III. Securities 7 7 8

IV. Liquid funds 12,745 13,175 11,840

V. End-of-year adjustments 1,529 1,484 2,395

SHORT-TERM RECEIVABLES AND ASSETS 337,365 271,098 297,635

ASSETS 434,346 357,945 381,484

EQUITY AND LIABILITIES 30.09.2008in Euro k

31.12.2007in Euro k

30.09.2007in Euro k

A. EQUITY

I. Subscribed capital 45,790 39,865 39,865

II. Capital reserve 41,541 19,149 19,149

III. Earnings reserve 12,409 9,490 8,951

IV. Net income for the year 42,443 33,192 28,351

V. Shares held by other shareholders 9,658 9,142 8,954

VI. Treasury stock 0 0 0

EQUITY 151,841 110,838 105,271

B. LONG-TERM LIABILITIES

I. Provisions for pensions 12,720 12,305 12,103

II. Provisions for taxes, similar obligations andother liabilities 8,732 9,225 8,494

III. Loans/convertible profit-sharing privileges 8,175 34,902 34,902

IV. Liabilities to banks 98,297 65,098 76,376

LONG-TERM LIABILITIES 127,924 121,530 131,875

C. SHORT TERM LIABILITIES

I. Provisions 11,813 10,451 10,887

II. Liabilities to banks 39,348 31,366 31,476

III. Trade payables 76,944 51,591 73,148

IV. Other liabilities 26,476 32,169 28,827

SHORT-TERM LIABILITIES TO BANKS 154,581 125,577 144,338

EQUITY AND LIABILITIES 434,346 357,945 381,484


Group Cash-Flow statement according IFRSGroup Cash-Flow statement at 30. September 2008 according IFRS

30.09.2008in Euro k

30.09.2007in Euro k

Period earnings before tax and extraordinary items 26,521 27,126

Depreciation 4,363 3,916

Increase/decrease in provisions 1,677 -414

Profit/loss from the disposal of long-term assets -121 -156

Interest expence 5,456 9,737

Decrease/increase in receivables and other assets -32,346 -22,880

Increase/decrease of inventories -23,480 -16,010

Increase/decrease in trade payables and other payables 15,630 12,541

Paid income tax -6,257 -2,937

Cash-flow from operational activity -8,557 10,923

Inflow from the disposal of long-term assets 596 522

Disbursements for the acquisition of long-term assets -8,776 -5,098

Disbursemets for the share purchase of consolidated companies -8,089 0

Interest received 620 459

Cash-flow from investment activities -15,649 -4,117

Inflow payments from the issues of shares 1,590 958

Inflow payments/disbursements from taking out/repaying loans 35,840 10,035

Paid interest -6,076 -10,196

Paid dividends -6,211 -5,089

Cash-flow from financing activities 25,143 -4,292

Exchage rate-dependend and other value change in cash and cash equivalents -1,366 0

Net change in cash -429 2,514

Cash and cash equivalents at the beginning of the period 13,174 9,326

Cash and cash equivalents at the end of the period 12,745 11,840

11,260,00

Free Cash Flow * -30,282 -3,390

* Free Cash Flow = + CF operating activities + CF from investment activities - paid interests


Consolidated Statements of Stockholders’ EquityAs 30. September 2008 in accordance with IFRS

in Euro kSubscribed

capitalCapitalreserve

Legalreserves

Other consolidated

reserves

Group netincome for

the year

Minorityinterests

Treasurystock

Group totalequity

Satus as per 01.01.2007 36,495 6,463 2,011 4,706 13,453 9,371 -784 71,715

Capital increase convertibles VBH Holding AG 3,020 12,078 15,098

Capital increase option privilege VBH Holding AG 350 608 958

Provisions for Cash Flow Hedge 550 550

Distribution -4,380 -4,380

Consolidation -3,072 -3,103 -6,175

Shift of currency adjustment item -490 201 -289

Annual net profit/loss 21,705 2,485 24,190

Allocation to retained income and other regrouping 7 5,240 -2,427 784 3,604

Status as per 30.09.2007 39,865 19,149 2,018 6,934 28,351 8,954 0 105,271

Satus as per 01.01.2008 39,865 19,149 2,095 7,395 33,192 9,142 0 110,838

Capital increase convertibles VBH Holding AG 5,345 21,381 26,726

Capital increase option privilege VBH Holding AG 580 1,011 1,591

Provisions for Cash Flow Hedge -5,980 -5,980

Distribution -103 -103

Consolidation -46 -1,782 -1,828

Shift of currency adjustment item

-158 211 53

Annual net profit/loss 18,177 2,087 20,264

Allocation to retained income and other regrouping 1 3,225 -2,946 280

Status as per 30.09.2008 45,790 41,541 2,096 10,313 42,443 9,658 0 151,841


Segment reportingSegment reporting as 30. September 2008 in accordance with IFRS

9 M 2007 in accordance with IFRS in Euro k

Segment Germany




Segment Corporate

ServicesConsolidation VBH Group

Sales external 263,827 121,354 209,655 3,066 0 597,901

Sales group 7,462 4,493 826 1,298 -10,215 3,864

Total sales 271,289 125,847 210,481 4,364 -10,215 601,765

Earnings before interestand taxes (EBIT) 7,685 10,574 21,346 -591 -2,147 -5 36,862

Total assets 115,686 104,879 119,791 5,234 206,232 -170,338 381,484

Total liabilities 139,882 76,861 55,903 11,314 124,563 -132,309 276,214

Employees 883 428 1,289 96 24 0 2,720

9 M 2008 in accordance with IFRS in Euro k

Segment Germany




Segment Corporate

ServicesConsolidation VBH Group

Sales external 271,389 134,067 229,823 7,365 0 642,644

Sales group 17,280 4,510 680 1,927 -17,236 7,160

Total sales 288,669 138,577 230,503 9,292 -17,236 649,804

Earnings before interestand taxes (EBIT) 9,069 7,543 18,918 124 -3,513 -163 31,978

Total assets 133,780 112,095 140,694 10,572 215,201 -177,996 434,346

Total liabilities 151,808 82,148 69,506 15,013 113,112 -149,082 282,505

Employees 883 540 1,319 89 27 2,858


Explanatory Notes

Basis

The Group Interim Financial Statement of VBH Holding AG

as of 30 September 2008 is prepared according to the

International Financial Reporting Standards (IFRS) for interim

reporting as are to be applied in the European Union (EU)

and according to the regulations of the Securities Trading Act

(WpHG) for group semi-annual financial reports. These Interim

Financial Statements only refer to the Group and contain all

information and notes details which according to IFRS and

WpHG are necessary for interim financial statements. The

Group Semi-Annual Financial Report should be read together

with the Annual Report 2007 and the additional information

contained therein.

The Group Annual Financial Statements of VBH Holding AG

as at 31 December 2007 was prepared in accordance with

valid International Financial Reporting Standards (IFRS) as

in effect on the closing date. The accounting and valuation

methods were continued unchanged when preparing this

Group Financial Report 9M/2008.

The Group Financial Report 9M/2008 is not certified and it

was not subject to any kind of audit review.

Consolidated Group

All essential companies besides VBH Holding AG were

included in the Group Financial Statements. The consolidated

Group at the closing of 2007 was changed through the

purchase of the Belgian company VBH Hody, which was

acquired on 14 April 2008. The time of transfer of the de facto

control was set at 1 January 2008. Included in the Italian sub-

group was Fercom Srl, Turin effective as of 1 January 2008.

Owing to irrelevant implications for the consolidated earnings,

the previous year figures were not adjusted retrospectively

after six months by changes in the consolidated group at the

end of 2007.

Segment reporting

The organisational structure of VBH is still divided into five

segments, which at the same time reflect the control structure

of the Group. The segments consist of Germany, Western

Europe, Eastern Europe, Other Markets and Corporate

Services.

Financial Results

In the reporting period, operating interest expenditure fell

from Euro 10.2 million to Euro 6.1 million. The financial

results improved from Euro -9.7 million in the previous year

to Euro -5.5 million. Decisive for this development are the

lower interest expenditure through the partial conversion of

the profit sharing certificates into shares as well as through

the improved rating of VBH Holding AG. Moreover, a one-off

expense of Euro 3.0 million for a derivative financial instrument

was reported in the financial results in the previous year.

Income Taxes

ncome taxes are recorded during the reporting period based

on the best estimate of the weighted average annual income

tax rate that is anticipated for each company for the entire

year. On this basis, a tax rate of 27% was used in calculations

for the reporting period.

Minority Interests

Minority interests in the profit result primarily from the minority

participations of foreign managing directors as well as of joint

venture partners in our respective regional companies.

Earnings per share

Earnings per share are determined by taking into account

the weighted number of average outstanding shares. When

calculating the diluted earnings per share, shares which may

potentially be issued from the still applicable stock option

plan are taken into account (status as at 30 September 2008:

45,790,408 shares).

Acquisition of own shares

On 9 June 2008, the Annual General Meeting authorised the

Executive Board to acquire up to 10% of the issued shares

by 8 December 2009. These were acquired through the stock

exchange or by way of a public purchase offer which was

directed to all shareholders.

If the shares are purchased through the stock exchange,

the purchase price may not exceed or fall short of the mean

value of the prices of shares in the company on the last 10

stock exchange trading days which preceded the purchase

by more than 10%. If these are purchased based on a public

offer to all shareholders then the purchase price paid to the

shareholders may not exceed or fall short of the average value


of the prices of shares of the company on the last 10 stock

exchange trading days which preceded the publication of the

offer by more than 20%.

The Executive Board is authorised in certain cases, with the

approval of the Supervisory Board and under the exclusion of

the subscription right of the shareholders, to sell the acquired

own shares in another manner than through the stock

exchange or by an offer to all shareholders.

The Executive Board was further authorised to collect own

shares in the company. This would lead to a reduction in

capital.

No activities in this respect have been carried out so far and

are currently not planned.

Information on Business Transactions with Closely

Associated Companies and Persons

All performance relationships with closely associated

companies are covenanted under contract and correspond

to market conditions. The company did not maintain relations

with closely associated persons during the reporting period.

Significant Events and Staff Changes

Effective as of 15 March 2008, Dr Ralf Lieb was appointed

as member of the Executive Board. Effective as of 31 March

2008, Mr Rainer Hribar was appointed Chairman of the

Executive Board.

Mr Stephan M. Heck was judicially appointed as a further

member representing the shareholders on the Supervisory

Board as of 8 January 2008 and was elected for a further

period of office at the Annual General Meeting with the other

shareholder representatives. Effective as of 9 June 2008, Mr

Martin Morlok was elected as employees’ representative on

the Supervisory Board, as a successor to Mr Jochen-Michael

Fussner.

Declaration pursuant to § 37y No. 1 Securities Trading Act

24 Group Financial Report 9M 2008 Declaration pursuant to § 37y No. 1 Securities Trading Act

The Executive Board assures in accordance with its best knowledge and belief that the Group Interim Financial Statement

dated 30 September 2008 provides a fair and accurate view that is commensurate with the actual statues of the Group’s

assets, finances and earnings in accordance with applicable accounting standards for preparing interim reports, and that

the course of business, including business results and the Group’s status, is reproduced in the Group Interim Director’s

Report in such a manner that conveys a fair and accurate view of actual conditions and that describes the Group’s essential

developments for the remainder of the fiscal year.

Korntal-Münchingen, November 2008

VBH Holding Aktiengesellschaft

Executive Board

Konzernzwischenabschluss VBH Konzern-Halbjahresfinanzbericht 2008 13

Further Information

26 Group Financial Report 9M 2008 Further information

Annual report 2008

March 31, 2009

Balance sheet press conference

March 31, 2009

Interim Report Q1 2009

May 14, 2009

Annual Shareholder‘s Meeting

June 10, 2009


August 13, 2009


November 12, 2009

Financial calender

Further information Group Financial Report 9M 2008 27

Contacts

VBH Holding AG

Siemensstraße 38

D-70825 Korntal-Münchingen

Telephone switchboard: +49 7150 15-0

Internet: www.vbh.de

Contact

Investor Relations +49 7150 15-200

e-Mail: [email protected]

Securities code no. 760070

ISIN Code: DE0007600702

Disclaimer

This report contains statements that are based on the future. Such kinds of forecast-related statements are based on certain

assumptions and expectations that were made at the time that this report was published. They are therefore linked to risks

and uncertainties, and actual results may deviate considerably from the results described in statements that are based on the

future. A large number of such risks and uncertainties will be determined by factors that are not subject to the influence of VBH

Holding AG and that cannot be assessed with certainty today. These include future market conditions and economic develop-

ments, the conduct of other market participants, achievement of any anticipated synergy effects and legal and political decisi-

ons. VBH Holding AG does not perceive itself as obligated to publish corrections of such kinds of statements that are based on

the future in order to reflect events or conditions that occur after publication of this report.

VBH Holding AG

Siemensstraße 38

70825 Korntal-Münchingen

Telefon +49 7150 15-0

www.vbh.de

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