Muehlhan AG Buy

Muehlhan AG
(CDAX, Industrial Goods & Services)
Buy
EUR 2.00
Price EUR 1.05
Upside 90.1 %
Frank Laser
flaser@warburg-research.com
+49 (0)40-309537-235
Value Indicators: EUR Share data: Description:
DCF: 2.07
FCF-Value Potential: 2.34
Bloomberg: M4N GR
Reuters: M4NG
ISIN: DE000A0KD0F7
C O M M E N T Published 31.07.2012 1
Service company for corrosion
protection at ships, offshore and
production plants
Market Snapshot: EUR m Shareholders: Risk Profile (WRe): 2012e
Market cap: 1
No. of shares (m): 20
EV: 12
Freefloat MC (ord.): 0
Ø Trad. Vol. (ord./30d): 7.72 th
Freefloat 34.2 %
GIVE 23.9 %
Syntegra 21.1 %
GIMS 13.2 %
Q2 figures in line with estimates; Full year guidance confirmed.
Figures Q2/2012: Comment on Figures:
FY End: 31.12.
in EUR m
Q2
2012
Q2
2012e
Q2
2011 yoy
6M
2012
6M
2012e
6M
2011 yoy
Beta: 1.5
Price / Book: 0.0
Net Gearing: 21 %
Debt / Equity: 104 %
Net debt / EBITDA: 1.0 x
Sales increase mainly triggered by satisfactory demand in Europe and
Asia Pacific
Ship Repair, Energy and Industry could more than compensate for the
(expected) sales decrease in Ship newbuilding
EBIT slightly below last year’s level due to the internationalisation of the
wind-energy business and corresponding start-up losses in Canada
(implementation of a new subsidiary)
Sales 47 45 41 13.7 % 90 88 81 11.4 %
EBIT 2 2 2 -10.1 % 2 2 2 -22.9
Margin 4.2 % 4.4 % 5.3 % 2.0 % 2.3 % 2.9 % %
Net income 1 1 1 14.8 % 0 0 1 -74.0
Margin 1.9 % 2.2 % 1.9 % 0.2 % 0.4 % 0.6 % %
EPS 0.05 0.04 0.04 25.0 % 0.01 0.01 0.03 -66.7
%
Monday, Muehlhan reported Q2 2012 figures which were in line with expectations, showed notable improvement on the weak first three months
of the year and supported visibility on the company’s full year guidance.
Sales soared by almost 14%, to which all business units – except the Ship Newbuilding segment - contributed. The latter was again negatively
influenced by structural changes in the market for new ships and saw a 13% sales decline in the second quarter. In contrast Ship Repair (Q2
sales: +25%), Energy (+30%) and Other Services (+33%) generated double-digit growth rates in Q2. Ship Repair was triggered by major
projects in the offshore business as well as heavy-loaded vessels and drillships.
Continuing high demand from the petrochemical industry led to healthy growth rates in the Energy segment. Structural engineering projects
and strong demand for complex steel foundations for offshore wind turbines boosted sales in Other Services.
Nevertheless, the strong sales volume growth did not fully feed through to the p/l as the operating business (Q2 EBIT: EUR -1.3m vs.
EUR 2.17m in Q2 2011) was negatively impacted by ramp-up costs in Canada for a new subsidiary of Muehlhan’s wind energy business.
Furthermore, the North American region had to cope with problems at a shipbuilding subsidiary on the Gulf Coast. In contrast, EBIT in Europe
increased by more than 50%, spurred by strong growth in the steel construction business, high demand at scaffolding and the recovery of the
repair segment.
Although operating in cyclical industries, the figures provide first evidence of the company’s successful restructuring and focussing efforts. As a
consequence, Muehlhan reiterated its FY 2012 guidance, aiming for sales of EUR 165-175m and EBIT in the range of EUR 3-5m.
Given Q2 figures and despite a rather gloomy macroeconomic picture, the recent drop in share price does not really seem justified. This comes
together with a healthy balance sheet (e.g. equity ratio north of 50%) and a high management quality. The Buy rating is reiterated.
Rel. Performance vs CDAX:
1 month: -8.6 %
6 months: -27.3 %
Year to date: -28.9 %
Trailing 12 months: -39.2 %
Company events:
11/15/12 Q3
FY End: 31.12.
in EUR m
CAGR
(11-14e) 2008 2009 2010 2011 2012e 2013e 2014e
Sales 0.8 % 207 191 165 172 170 172 176
Change Sales yoy 5.3 % -7.6 % -13.5 % 4.4 % -1.6 % 1.5 % 2.5 %
Gross profit margin 54.9 % 52.7 % 56.7 % 58.1 % 59.0 % 60.0 % 60.0 %
EBITDA 33.5 % 17 15 7 6 11 13 15
Margin 8.2 % 8.0 % 4.2 % 3.7 % 6.4 % 7.7 % 8.7 %
EBIT - 10 8 -2 -1 4 6 8
Margin 4.8 % 4.4 % -1.5 % -0.8 % 2.3 % 3.5 % 4.6 %
Net income - 4 4 -4 -4 1 3 4
EPS - 0.22 0.20 -0.23 -0.21 0.06 0.13 0.20
EPS adj. - 0.22 0.20 -0.23 -0.21 0.06 0.13 0.20
DPS - 0.00 0.06 0.00 0.00 0.00 0.05 0.08
Dividend Yield 0.0 % 3.1 % 0.0 % 0.0 % 0.0 % 4.8 % 7.7 %
FCFPS 0.32 0.34 -0.22 -0.17 0.14 0.22 0.18
EV / Sales 0.4 x 0.2 x 0.4 x 0.3 x 0.1 x 0.0 x 0.0 x
EV / EBITDA 4.8 x 3.0 x 8.7 x 7.0 x 1.1 x 0.6 x 0.3 x
EV / EBIT 8.3 x 5.5 x -24.6 x -34.3 x 3.0 x 1.3 x 0.6 x
P / E 12.4 x 9.6 x -11.5 x -7.9 x 17.5 x 8.1 x 5.2 x
P / E adj. 12.4 x 9.6 x -11.5 x -7.9 x 17.5 x 8.1 x 5.2 x
FCF Yield Potential 10.4 % 17.5 % 2.9 % 2.3 % 47.0 % 94.7 % 168.9 %
Net Debt 29 9 11 13 11 6 4
ROE 7.3 % 6.1 % -7.0 % -6.7 % 2.3 % 5.0 % 7.2 %
ROCE 6.6 % 6.0 % -3.3 % -1.8 % 3.3 % 5.1 % 6.7 %
Guidance: 2012: Sales EUR 165-175m; EBIT EUR 3-5m

Muehlhan AG
Sales development
in EUR m
Source: Warburg Research
Company Background
Sales by regions
2011; in %
Source: Warburg Research
C O M M E N T Published 31.07.2012 2
EBIT development
in EUR m
Source: Warburg Research
Muehlhan is one of the leading providers of specialized services in connection with corrosion protection of surfaces, particularly for
ships, infrastructural facilities like bridges, drilling rigs + wind generators.
The coating is applied on newly built objects first and is renewed in regular maintenance intervals of 5-10 years.
Ship Newbuilding and Ship Repair are the company's important pillars. As a result of the diversification of the business activities,
however, the Industry Services segment has the highest sales contribution by now.
This is partly due to the regional diversification for which the Middle East is playing an increasingly important role and where
Muehlhan solely provides industry services.
Competitive Quality
The competitive quality vis-à-vis a high number of mainly smaller competitors is a result of...
...the comparably strong financing power, the long-standing customer relationships as well as the brand name resulting from quality
and tradition.
The capital intensity of larger and more complex orders limits the ROCE to some extent but it also creates barriers to market entry for
smaller competitors.
Although the shipping segments should continue to be challenging Muehlhan is likely to benefit from the expected market
consolidation as less diversified and financially weaker competitors will withdraw from the market.
EBT development
in EUR m
Source: Warburg Research
Sales by segments
2011; in %
Source: Warburg Research
Net income development
in EUR m
Source: Warburg Research

Muehlhan AG
DCF model
Detailed forecast period Transitional period Term. Value
Figures in EUR m 2012e 2013e 2014e 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e
Sales 170 172 176 181 185 190 195 199 203 208 212 216 220
Sales change -1.6 % 1.5 % 2.5 % 2.5 % 2.5 % 2.5 % 2.5 % 2.5 % 2.0 % 2.0 % 2.0 % 2.0 % 2.0 % 2.0 %
EBIT 4 6 8 7 7 7 7 7 7 7 7 8 8
EBIT-margin 2.3 % 3.5 % 4.6 % 4.0 % 4.0 % 3.5 % 3.5 % 3.5 % 3.5 % 3.5 % 3.5 % 3.5 % 3.5 %
Tax rate (EBT) 34.0 % 34.0 % 34.0 % 34.0 % 34.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 %
NOPAT 3 4 5 5 5 4 4 5 5 5 5 5 5
Depreciation 7 7 7 6 6 6 7 7 7 7 7 7 7
in % of Sales 4.1 % 4.2 % 4.1 % 3.4 % 3.4 % 3.4 % 3.4 % 3.4 % 3.4 % 3.4 % 3.4 % 3.4 % 3.4 %
Changes in provisions 0 0 0 0 0 0 0 0 0 0 0 0 0
Change in Liquidity from
- Working Capital -7 -1 1 1 2 2 1 1 1 2 1 1 1
- Capex 6 6 7 6 6 7 7 7 7 7 7 7 7
Capex in % of Sales 3.8 % 3.8 % 3.8 % 3.5 % 3.5 % 3.5 % 3.5 % 3.5 % 3.5 % 3.4 % 3.4 % 3.4 % 3.4 %
Other 0 0 0 0 0 0 0 0 0 0 0 0 0
Free Cash Flow (WACC
Model)
10 6 5 3 3 3 4 4 4 3 4 4 4 4
PV of FCF 10 5 4 2 2 2 2 2 2 1 2 1 1 18
share of PVs 34.51 % 31.92 % 33.57 %
Model parameter Valuation (m)
Derivation of WACC: Derivation of Beta: Present values 2024e 36
Terminal Value 18
Debt ratio 25.00 % Financial Strength 1.50 Financial liabilities 23
Cost of debt 4.6 % Liquidity 1.50 Pension liabilities 1
Market return 9.00 % Cyclicality 1.50 Hybrid capital 0
Risk free rate 4.00 % Transparency 1.50 Minority interest 0
Others 1.50 Market val. of investments 0
Liquidity 11 No. of shares (m) 19.5
WACC 9.76 % Beta 1.50 Equity Value 40 Value per share (EUR) 2.07
Sensitivity Value per Share (EUR)
Terminal Growth Delta EBIT-margin
Beta (WACC) 1.25 % 1.50 % 1.75 % 2.00 % 2.25 % 2.50 % 2.75 % Beta (WACC) -1.5 pp -1.0 pp -0.5 pp 0.0 +0.5 pp +1.0 pp +1.5 pp
1.77 (10.8 %) 1.75 1.77 1.79 1.81 1.83 1.85 1.88 1.77 (10.8 %) 0.76 1.11 1.46 1.81 2.16 2.51 2.85
1.63 (10.3 %) 1.86 1.88 1.90 1.93 1.95 1.98 2.01 1.63 (10.3 %) 0.82 1.19 1.56 1.93 2.30 2.67 3.04
1.57 (10.0 %) 1.92 1.94 1.97 2.00 2.02 2.05 2.09 1.57 (10.0 %) 0.85 1.23 1.62 2.00 2.38 2.76 3.14
1.50 (9.8 %) 1.99 2.01 2.04 2.07 2.10 2.13 2.17 1.50 (9.8 %) 0.89 1.28 1.67 2.07 2.46 2.85 3.24
1.43 (9.5 %) 2.05 2.08 2.11 2.14 2.18 2.21 2.25 1.43 (9.5 %) 0.93 1.33 1.74 2.14 2.55 2.95 3.36
1.37 (9.3 %) 2.13 2.16 2.19 2.22 2.26 2.30 2.35 1.37 (9.3 %) 0.97 1.39 1.81 2.22 2.64 3.06 3.48
1.23 (8.8 %) 2.29 2.32 2.36 2.41 2.45 2.50 2.55 1.23 (8.8 %) 1.06 1.51 1.96 2.41 2.85 3.30 3.75
High beta due to low visibility and high cyclicality
Long term growth rates in line with market growth
C O M M E N T Published 31.07.2012 3

Muehlhan AG
Free Cash Flow Value Potential
Warburg Research's valuation tool "FCF Value Potential" reflects the ability of the company to generate sustainable free cash flows. It is based on the
"FCF potential" - a FCF "ex growth" figure - which assumes unchanged working capital and pure maintenance capex. A value indication is derived by
discounting the “FCF potential” of a given year with the weighted costs of capital. The fluctuating value indications over time add a timing element to the
DCF model (our preferred valuation tool).
in EUR m 2008 2009 2010 2011 2012e 2013e 2014e
Net Income before minorities 5 4 -4 -4 1 3 4
+ Depreciation + Amortisation 7 7 9 8 7 7 7
- Net Interest Income -2 -2 -1 -2 -2 -2 -2
- Maintenance Capex 6 5 5 5 5 5 5
+ Others 0 0 0 0 0 0 0
= Free Cash Flow Potential 9 8 2 1 5 7 8
Free Cash Flow Yield Potential 10.4 % 17.5 % 2.9 % 2.3 % 47.0 % 94.7 % 168.9 %
WACC 9.76 % 9.76 % 9.76 % 9.76 % 9.76 % 9.76 % 9.76 %
= Enterprise Value (EV) 82 46 61 45 12 7 5
= Fair Enterprise Value 87 83 18 11 56 72 86
- Net Debt (Cash) 12 12 12 12 10 6 3
- Pension Liabilities 1 1 1 1 1 1 1
- Others 0 0 0 0 0 0 0
- Market value of minorities 0 0 0 0 0 0 0
+ Market value of investments 0 0 0 0 0 0 0
= Fair Market Capitalisation 74 69 5 n.a. 46 66 82
No. of shares (total) (m) 20 20 20 20 20 20 20
= Fair value per share (EUR) 3.80 3.56 0.26 n.a. 2.34 3.38 4.20
premium (-) / discount (+) in % 122.5 % 221.7 % 304.8 %
Sensitivity Fair value per Share (EUR)
12.76 % 2.75 2.56 0.04 n.a. 1.66 2.51 3.16
11.76 % 3.04 2.84 0.10 n.a. 1.85 2.75 3.45
10.76 % 3.38 3.16 0.17 n.a. 2.07 3.04 3.79
WACC 9.76 % 3.80 3.56 0.26 n.a. 2.34 3.38 4.20
8.76 % 4.31 4.04 0.37 n.a. 2.67 3.81 4.70
7.76 % 4.95 4.65 0.50 0.00 3.08 4.34 5.33
6.76 % 5.78 5.44 0.68 0.10 3.62 5.03 6.15
Cash flows about to stabilise due to restructuring and new focus
Long term potential significantly above current share price
C O M M E N T Published 31.07.2012 4

Muehlhan AG
Valuation
2008 2009 2010 2011 2012e 2013e 2014e
Price / Book 0.8 x 0.6 x 0.8 x 0.6 x 0.0 x 0.0 x 0.0 x
Book value per share ex intangibles 1.82 2.01 2.01 1.86 1.49 1.63 1.77
EV / Sales 0.4 x 0.2 x 0.4 x 0.3 x 0.1 x 0.0 x 0.0 x
EV / EBITDA 4.8 x 3.0 x 8.7 x 7.0 x 1.1 x 0.6 x 0.3 x
EV / EBIT 8.3 x 5.5 x -24.6 x -34.3 x 3.0 x 1.3 x 0.6 x
EV / EBIT adj.* 8.3 x 5.5 x -24.6 x -34.3 x 3.0 x 1.3 x 0.6 x
P / FCF 8.6 x 5.6 x -12.3 x -9.9 x 7.6 x 4.8 x 5.6 x
P / E 12.4 x 9.6 x -11.5 x -7.9 x 17.5 x 8.1 x 5.2 x
P / E adj.* 12.4 x 9.6 x -11.5 x -7.9 x 17.5 x 8.1 x 5.2 x
Dividend Yield 0.0 % 3.1 % 0.0 % 0.0 % 0.0 % 4.8 % 7.7 %
Free Cash Flow Yield Potential 10.4 % 17.5 % 2.9 % 2.3 % 47.0 % 94.7 % 168.9 %
*Adjustments made for: -
C O M M E N T Published 31.07.2012 5

Muehlhan AG
Consolidated profit & loss
In EUR m 2008 2009 2010 2011 2012e 2013e 2014e
Sales 207 191 165 172 170 172 176
Change Sales yoy 5.3 % -7.6 % -13.5 % 4.4 % -1.6 % 1.5 % 2.5 %
Increase / decrease in inventory 0 0 0 0 0 0 0
Own work capitalised 0 0 0 0 0 0 0
Total Sales 207 191 165 172 170 172 176
Material Expenses 93 90 71 72 69 69 71
Gross profit 113 101 94 100 100 103 106
Gross profit margin 54.9 % 52.7 % 56.7 % 58.1 % 59.0 % 60.0 % 60.0 %
Personnel expenses 71 63 62 66 64 64 65
Other operating income 7 6 5 4 4 4 4
Other operating expenses 32 29 29 31 29 30 30
Unfrequent items 0 0 0 0 0 0 0
EBITDA 17 15 7 6 11 13 15
Margin 8.2 % 8.0 % 4.2 % 3.7 % 6.4 % 7.7 % 8.7 %
Depreciation of fixed assets 7 7 6 8 7 7 7
EBITA 10 8 1 -1 4 6 8
Amortisation of intangible assets 0 0 3 0 0 0 0
Goodwill amortization 0 0 0 0 0 0 0
EBIT 10 8 -2 -1 4 6 8
Margin 4.8 % 4.4 % -1.5 % -0.8 % 2.3 % 3.5 % 4.6 %
EBIT adj. 10 8 -2 -1 4 6 8
Interest income 0 1 0 0 0 0 0
Interest expenses 3 2 2 2 2 2 2
Other financial income (loss) 0 0 0 0 0 0 0
EBT 8 7 -4 -3 2 4 6
Margin 3.7 % 3.4 % -2.4 % -2.0 % 1.1 % 2.2 % 3.3 %
Total taxes 3 2 1 1 1 1 2
Net income from continuing operations 5 4 -4 -4 1 3 4
Income from discontinued operations (net of tax) 0 0 0 0 0 0 0
Net income before minorities 5 4 -4 -4 1 3 4
Minority interest -1 -1 0 0 0 0 0
Net income 4 4 -4 -4 1 3 4
Margin 2.1 % 2.0 % -2.6 % -2.3 % 0.7 % 1.5 % 2.2 %
Number of shares, average 20 19 19 19 19 19 19
EPS 0.22 0.20 -0.23 -0.21 0.06 0.13 0.20
EPS adj. 0.22 0.20 -0.23 -0.21 0.06 0.13 0.20
*Adjustments made for:
Guidance: 2012: Sales EUR 165-175m; EBIT EUR 3-5m
Financial Ratios
2008 2009 2010 2011 2012e 2013e 2014e
Total Operating Costs / Sales 91.8 % 92.0 % 95.8 % 96.3 % 93.6 % 92.3 % 91.3 %
Operating Leverage 46.3 x 2.0 x n.a. -10.7 x n.a. 35.0 x 14.1 x
EBITDA / Interest expenses 6.8 x 6.4 x 4.1 x 3.0 x 4.9 x 5.7 x 6.4 x
Tax rate (EBT) 34.1 % 33.0 % -15.3 % -17.0 % 34.0 % 34.0 % 34.0 %
Dividend Payout Ratio 0.0 % 26.7 % 0.0 % 0.0 % 0.0 % 38.0 % 39.8 %
Sales per Employee 83,674 83,180 66,002 68,910 67,800 68,800 70,520
Sales, EBITDA
in EUR m
Source: Warburg Research
Operating Performance
in %
Source: Warburg Research
C O M M E N T Published 31.07.2012 6
Performance per Share
Source: Warburg Research

Muehlhan AG
Consolidated balance sheet
In EUR m 2008 2009 2010 2011 2012e 2013e 2014e
Assets
Goodwill and other intangible assets 25 26 23 21 21 21 21
thereof other intangible assets 1 1 1 1 0 0 0
thereof Goodwill 25 25 22 21 21 21 21
Property, plant and equipment 30 28 23 23 23 22 22
Financial assets 10 0 0 0 0 0 0
Other long-term assets 0 0 0 0 0 0 0
Fixed assets 65 54 46 45 44 43 42
Inventories 4 4 4 4 3 3 4
Accounts receivable 40 36 37 43 35 35 36
Liquid assets 8 12 12 11 13 18 20
Other short-term assets 14 10 9 10 10 10 10
Current assets 66 61 62 67 61 66 69
Total Assets 131 116 108 112 105 109 111
Liabilities and shareholders' equity
Subscribed capital 20 20 20 20 20 20 20
Capital reserve 28 28 28 28 28 28 28
Retained earnings 4 4 10 9 0 1 3
Other equity components 10 14 4 0 1 3 4
Shareholder's equity 61 65 61 57 49 52 54
Minority interest 2 2 0 0 3 3 3
Total equity 63 66 61 57 52 54 57
Provisions 2 1 2 2 2 2 2
thereof provisions for pensions and similar obligations 1 1 1 1 1 1 1
Financial liabilites (total) 36 21 22 23 23 23 23
thereof short-term financial liabilities 1 1 1 1 1 1 1
Accounts payable 17 13 12 17 15 16 16
Other liabilities 14 14 12 14 14 14 14
Liabilities 68 49 47 55 53 54 54
Total liabilities and shareholders' equity 131 116 108 112 105 109 111
Financial Ratios
2008 2009 2010 2011 2012e 2013e 2014e
Efficiency of Capital Employment
Operating Assets Turnover 3.6 x 3.5 x 3.1 x 3.2 x 3.7 x 3.9 x 3.9 x
Capital Employed Turnover 2.1 x 2.2 x 2.0 x 2.1 x 2.2 x 2.2 x 2.2 x
ROA 6.6 % 7.1 % -9.5 % -8.7 % 2.8 % 5.8 % 9.0 %
Return on Capital
ROCE 6.6 % 6.0 % -3.3 % -1.8 % 3.3 % 5.1 % 6.7 %
ROE 7.3 % 6.1 % -7.0 % -6.7 % 2.3 % 5.0 % 7.2 %
Adj. ROE 7.3 % 6.1 % -7.0 % -6.7 % 2.3 % 5.0 % 7.2 %
Balance sheet quality
Net Debt 29 9 11 13 11 6 4
Net Financial Debt 28 8 10 12 10 6 3
Net Gearing 45.7 % 13.7 % 17.5 % 23.2 % 20.6 % 11.8 % 6.9 %
Net Financial Debt / EBITDA 165.8 % 54.7 % 143.0 % 193.3 % 90.1 % 42.4 % 19.8 %
Book Value / Share 3.1 3.3 3.2 3.0 2.6 2.7 2.9
Book value per share ex intangibles 1.8 2.0 2.0 1.9 1.5 1.6 1.8
ROCE Development
Source: Warburg Research
Net debt
in EUR m
Source: Warburg Research
C O M M E N T Published 31.07.2012 7
Book Value per Share
in EUR
Source: Warburg Research

Muehlhan AG
Consolidated cash flow statement
In EUR m 2008 2009 2010 2011 2012e 2013e 2014e
Net income 5 4 -4 -4 1 3 4
Depreciation of fixed assets 7 7 6 8 7 7 7
Amortisation of goodwill 0 0 0 0 0 0 0
Amortisation of intangible assets 0 0 3 0 0 0 0
Increase/decrease in long-term provisions 0 0 0 0 0 0 0
Other non-cash income and expenses -1 2 0 0 -3 0 0
Cash Flow 11 13 5 4 5 10 11
Increase / decrease in inventory 0 0 0 -1 1 0 0
Increase / decrease in accounts receivable 1 3 -2 -5 8 0 -1
Increase / decrease in accounts payable 2 -3 -2 5 -2 1 0
Increase / decrease in other working capital positions 0 0 -1 1 -3 0 0
Increase / decrease in working capital 4 0 -4 0 4 1 -1
Net cash provided by operating activities 15 13 1 4 9 11 10
Investments in intangible assets 0 -1 0 0 0 0 0
Investments in property, plant and equipment -9 -6 -5 -7 -6 -6 -7
Payments for acquisitions -2 0 0 0 0 0 0
Financial investments -10 0 0 0 0 0 0
Income from asset disposals 12 10 5 1 0 0 0
Net cash provided by investing activities -8 4 1 -6 -6 -6 -7
Change in financial liabilities -1 0 1 1 0 0 0
Dividends paid 0 0 -1 0 0 0 -1
Purchase of own shares 0 -1 -1 0 0 0 0
Capital measures 0 -15 0 0 0 0 0
Others -5 4 -1 0 0 0 0
Net cash provided by financing activities -6 -12 -2 1 0 0 -1
Change in liquid funds 1 5 -1 -1 2 4 2
Effects of exchange-rate changes on cash 0 0 1 0 0 0 0
Cash and cash equivalent at end of period 8 12 12 11 13 18 20
Financial Ratios
2008 2009 2010 2011 2012e 2013e 2014e
Cash Flow
Free Cash Flow 6 7 -4 -3 3 4 4
Free Cash Flow / Sales 3.0 % 3.5 % -2.5 % -1.8 % 1.5 % 2.4 % 2.0 %
Free Cash Flow Potential 9 8 2 1 5 7 8
Free Cash Flow / Sales 3.0 % 3.5 % -2.5 % -1.8 % 1.5 % 2.4 % 2.0 %
Free Cash Flow / Net Profit 142.5 % 171.4 % 93.9 % 81.1 % 213.6 % 168.4 % 92.0 %
Interest Received / Avg. Cash 3.1 % 5.1 % 2.5 % 0.6 % 1.2 % 0.9 % 0.8 %
Interest Paid / Avg. Debt 6.9 % 8.4 % 8.0 % 9.3 % 9.5 % 9.9 % 10.5 %
Management of Funds
Investment ratio 4.2 % 3.3 % 3.0 % 4.0 % 3.8 % 3.8 % 3.8 %
Maint. Capex / Sales 2.8 % 2.8 % 2.8 % 2.8 % 2.8 % 2.8 % 2.8 %
Capex / Dep 123.3 % 91.6 % 52.3 % 89.3 % 91.7 % 89.5 % 91.6 %
Avg. Working Capital / Sales 12.4 % 13.9 % 16.8 % 17.3 % 15.8 % 13.3 % 12.9 %
Trade Debtors / Trade Creditors 232.3 % 270.4 % 321.8 % 256.2 % 232.2 % 217.9 % 223.4 %
Inventory Turnover 20.9 x 24.0 x 19.5 x 17.2 x 20.1 x 20.0 x 20.0 x
Receivables collection period (days) 70 68 83 90 75 74 74
Payables payment period (days) 67 53 59 84 79 85 83
Cash conversion cycle (Days) -46 -35 -36 -58 -57 -63 -61
CAPEX and Cash Flow
in EUR m
Source: Warburg Research
Free Cash Flow Generation
Source: Warburg Research
C O M M E N T Published 31.07.2012 8
Working Capital
Source: Warburg Research

Muehlhan AG
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mentioned in the report. Opinions expressed in this report are subject to change without notice. All rights reserved.
COPYRIGHT NOTICE
This work including all its parts is protected by copyright. Any use beyond the limits provided by copyright law without permission is
prohibited and punishable. This applies, in particular, to reproductions, translations, microfilming, and storage and processing on
electronic media of the entire content or parts thereof.
DISCLOSURE ACCORDING TO § 34B OF THE GERMAN SECURITIES TRADING ACT AND FINANV
The valuation underlying the rating of the company analysed in this report is based on generally accepted and widely used methods of
fundamental valuation, such as the DCF model, Free Cash Flow Value Potential, peer group comparison and – where applicable – a
sum-of-the-parts model.
M.M.Warburg & CO KGaA and Warburg Research GmbH have set up internal organisational and administrative arrangements to
prevent and avoid possible conflicts of interest and, where applicable, to disclose them.
Valuations, ratings and price targets for the companies analysed by Warburg Research GmbH are subject to constant reviews and
may therefore change, if any of the fundamental factors underlying these items do change.
All share prices given in this equity analysis are closing prices on the date given in the analysis, except where stated otherwise.
Neither Warburg Research GmbH’s analysts nor M.M.Warburg & CO KGaA’s analysts do receive any payments directly or indirectly
from any investment banking activity of M.M.Warburg Bank or an affiliated company.
M.M.Warburg & CO KGaA and Warburg Research GmbH are under supervision of the BaFin – German Federal Financial Supervisory
Authority.
SOURCES
All data and consensus estimates have been obtained from FactSet except where stated otherwise.
C O M M E N T Published 31.07.2012 9

Muehlhan AG
Section 34b of the German Securities Trading Act in combination with the FinAnV requires an enterprise preparing a
securities analysis to point out possible conflicts of interest with respect to the company that is the subject of the analysis.
A conflict of interest is assumed, in particular, when the enterprise preparing the analysis …
-1- … or companies affiliated with this enterprise holds 5% or more of the share capital of the analysed company
-2-
-3-
-4-
… or companies affiliated with this enterprise was a member in a consortium which acquired the shares of the
analysed company within the last twelve months
… or companies affiliated with this enterprise manages the securities of the analysed company on the basis of
an existing contract
… or companies affiliated with this enterprise over the previous 12 months has been providing investment
banking services for the analysed company for which a compensation has been or will be paid
-5- … effected an agreement with the analysed company for the preparation of the financial analysis
-6- … or companies affiliated with this enterprise regularly trade in shares or derivatives of the analysed company
-7-
… or the analyst responsible for this company has other important financial interests in relation to the analysed
company such as e.g. the performance of mandates for the analysed company
Company Disclosure Link to the historical price targets and rating changes (last 12 months)
Muehlhan AG 5, 6 http://www.mmwarburg.com/disclaimer/disclaimer_en/DE000A0KD0F7.htm
C O M M E N T Published 31.07.2012 10

Muehlhan AG
INVESTMENT RECOMMENDATION
Investment recommendation: expected direction of the share price development of the financial instrument up to the given price target
in the opinion of the analyst who covers this financial instrument.
-B- Buy: The price of the analysed financial instrument is expected to rise over the next 12 months.
-H- Hold:
The price of the analysed financial instrument is expected to remain mostly flat over the
next 12 months.
-S- Sell: The price of the analysed financial instrument is expected to fall over the next 12 months.
“-“ Rating suspended: The available information currently does not permit an evaluation of the company.
WARBURG RESEARCH GMBH – RESEARCH UNIVERSE BY RATING
Rating Number of stocks % of Universe
Buy 116 62
Hold 59 31
Sell 9 5
Rating suspended 4 2
Total 188 100
WARBURG RESEARCH GMBH – ANALYSED RESEARCH UNIVERSE BY RATING …
… Looking only at companies for which a disclosure according to § 34b of the Germany Securities Trading Act and the
FinAnV has to be made.
Rating Number of stocks % of Universe
Buy 101 66
Hold 43 28
Sell 7 5
Rating suspended 3 2
Total 154 100
PRICE AND RATING HISTORY MUEHLHAN AG AS OF 31.07.2012
C O M M E N T Published 31.07.2012 11
The chart has markings if Warburg Research GmbH
changed its rating in the last 12 months. Every marking
represents the date and closing price on the day of the
rating change.

Muehlhan AG
RESEARCH
Christian Bruns +49 40 309537-253 Henner Rüschmeier +49 40 309537-270
Head of Research cbruns@warburg-research.com Head of Research hrueschmeier@warburg-research.com
Christian Cohrs +49 40 309537-175 Roland Rapelius +49 40 309537-220
Engineering, Logistics ccohrs@warburg-research.com Engineering, Logistics rrapelius@warburg-research.com
Felix Ellmann +49 40 309537-120 Jochen Reichert +49 40 309537-130
Software, IT fellmann@warburg-research.com Telco, Internet, Media jreichert@warburg-research.com
Jörg Philipp Frey +49 40 309537-258 Christopher Rodler +49 40 309537-290
Retail, Consumer Goods jfrey@warburg-research.com Utilities crodler@warburg-research.com
Ulrich Huwald +49 40 309537-255 Malte Schaumann +49 40 309537-170
Health Care, Pharma uhuwald@warburg-research.com Technology mschaumann@warburg-research.com
Thilo Kleibauer +49 40 309537-257 Susanne Schwartze +49 40 309537-155
Retail, Consumer Goods tkleibauer@warburg-research.com Telco, Internet, Media sschwartze@warburg-research.com
Torsten Klingner +49 40 309537-260 Oliver Schwarz +49 40 309537-250
Real Estate tklingner@warburg-research.com Chemicals oschwarz@warburg-research.com
Eggert Kuls +49 40 309537-256 Marc-René Tonn +49 40 309537-259
Engineering ekuls@warburg-research.com Automobiles, Car Suppliers mtonn@warburg-research.com
Frank Laser +49 40 309537-235 Björn Voss +49 40 309537-254
Construction, Industrials flaser@warburg-research.com Car Suppliers, Steel bvoss@warburg-research.com
Andreas Pläsier +49 40 309537-246 Andreas Wolf +49 40 309537-140
Banks, Financial Services aplaesier@warburg-research.com Software, IT awolf@warburg-research.com
Malte Räther +49 40 309537-185 Stephan Wulf +49 40 309537-150
Technology mraether@warburg-research.com Utilities swulf@warburg-research.com
SALES SALES TRADING
Holger Nass +49 40 3282-2669 Oliver Merckel +49 40 3282-2634
Head of Equity Sales hnass@mmwarburg.com Head of Sales Trading omerckel@mmwarburg.com
Klaus Schilling +49 40 3282-2664 Gudrun Bolsen +49 40 3282-2679
Deputy Head of Equity Sales kschilling@mmwarburg.com Sales Trading gbolsen@mmwarburg.com
Christian Alisch +49 40 3282-2667 Bastian Quast +49 40 3282-2701
Scandinavia calisch@mmwarburg.com Sales Trading bquast@mmwarburg.com
Robert Conredel +49 40 3282-2633 Patrick Schepelmann +49 40 3282-2700
Germany rconredel@mmwarburg.com Sales Trading pschepelmann@mmwarburg.com
Matthias Fritsch +49 40 3282-2696 Thekla Struve +49 40 3282-2668
United Kingdom mfritsch@mmwarburg.com Sales Trading tstruve@mmwarburg.com
Michael Kriszun +49 40 3282-2695 Jörg Treptow +49 40 3262-2658
United Kingdom mkriszun@mmwarburg.com Sales Trading jtreptow@mmwarburg.com
Marc Niemann +49 40 3282-2660
Germany mniemann@mmwarburg.com Support
Dirk Rosenfelder +49 40 3282-2692 Katharina Bruns +49 40 3282-2694
Austria, Switzerland drosenfelder@mmwarburg.com Roadshow/Marketing kbruns@mmwarburg.com
Julian Straube +49 40 3282-2666
Germany jstraube@mmwarburg.com
Philipp Stumpfegger +49 40 3282-2635
Australia pstumpfegger@mmwarburg.com
Our research can be found under:
MACRO RESEARCH
C O M M E N T Published 31.07.2012 12
Carsten Klude +49 40 3282-2572
Macro Research cklude@mmwarburg.com
Matthias Thiel +49 40 3282-2401
Macro Research mthiel@mmwarburg.com
Dr. Christian Jasperneite +49 40 3282-2439
Investment Strategy cjasperneite@mmwarburg.com
Warburg Research research.mmwarburg.com/en/index.html Thomson www.thomson.com
Bloomberg MMWA GO Reuters www.knowledge.reuters.com
FactSet www.factset.com Capital IQ www.capitaliq.com
For access please contact:
Andrea Carstensen +49 40 3282-2632 Kerstin Muthig +49 40 3282-2703
Sales Assistance acarstensen@mmwarburg.com Sales Assistance kmuthig@mmwarburg.com