Corporate  |  MAN SE 

Strong order intake, substantial earnings growth

Interim Report as of June 30, 2011 – Q2 2011

Dear Shareholders,

On May 9, 2011, Volkswagen AG increased its equity interest in MAN to 30.5% and subsequently published a takeover offer to all other MAN shareholders. By the end of the offer period on June 29, our shareholders had tendered shares to Volkswagen that would raise its share of the voting rights in MAN to 55.9%. Subject to antitrust approval, the decision by these shareholders means that MAN will be part of the VW family in the future.

Our alliance with Volkswagen and Scania will then enter a new, active phase. Our goal in this is clear: We aim to jointly leverage potential with the aim of achieving profitable growth in all markets and continuing to develop MAN in a way that unlocks value.

Closer cooperation will lead to substantial synergies in purchasing, development, and production and will therefore create significant value for all parties. MAN can better leverage the potential offered by globalization and technological change by working with these partners than on its own. MAN, VW, and Scania are convinced of this industrial logic – bundling expertise and resources and therefore being more powerful together – for which we are the right partners, too.

MAN is in a strong position to achieve this. We have leading-edge technologies, healthy market positions, international alliances, and established, high-value brands. This is confirmed by our current performance. The MAN Group’s order intake in the first half of 2011 increased by 22% year-on-year to €8.8 billion, and by 18% in Q2. MAN Truck & Bus in particular recorded extremely dynamic growth in the first six months, up 31% to €4.8 billion. MAN Latin America also substantially lifted its order intake by 19% to €1.8 billion. Our second business area, Power Engineering, grew by 8% to €2.3 billion, including an impressive 20% increase in the second quarter.

The MAN Group boosted its revenue by 18% in the first half of the year to €8.0 billion. The European commercial vehicles business grew significantly by 30%. MAN Latin America also sharply increased its revenue in the first six months by 19%, setting a new quarterly record of €958 million in Q2. MAN Diesel & Turbo’s revenue remained virtually constant. The Engines & Marine Systems strategic business unit recorded 8% growth to €817 million, while the other strategic business units and Renk saw slight declines.

Once again, the MAN Group’s operating profit also grew strongly in the first half of the year, up 88% to €762 million. This increase is due mainly to MAN Truck & Bus, which contributed €274 million. MAN Latin America (€201 million) and MAN Diesel & Turbo (€230 million) were again key earnings drivers. As a result, the MAN Group’s return on sales rose from 6.0% in the prior-year period to 9.6% in the first six months of 2011. The European commercial vehicles business in particular improved significantly, enabling the Commercial Vehicles business area to record a 7.8% return on sales. The Power Engineering business area was again highly profitable, with a return on sales of 13.3% compared with 12.6% in H1/2010.

MAN also has a strong technology base. Reconciling economic and ecological issues is top of our agenda here. The commercial vehicle market will be increasingly dominated by strict environmental requirements. MAN possesses the leading expertise to meet these demands, for example, in hybrid technology, fuel-efficient aerodynamic design, or meeting the Euro VI emissions standard from 2013.

The same applies to large-bore diesel engines. Here, too, MAN uses cutting-edge research to meet the stricter requirements for marine transportation. In addition, the Power Engineering business area can combine a variety of key technologies and offer them from a single source, for example, dual fuel engines, engines with exhaust gas and waste heat recovery, as well as highly efficient compressors and wind power gear units.

MAN will also contribute engineering skills and experience in international markets to its future partnership with VW and Scania. This will herald a new chapter in MAN’s long history. In the future, we will actively seize the resulting opportunities.

Our positive performance is already evident today. We are able to raise the outlook for fiscal 2011 that we issued in Q1: We are expecting full-year revenue growth of 10 to 15% and a return on sales that slightly exceeds our average long-term target of 8.5%.

Dr.-Ing. Georg Pachta-Reyhofen